In this paper we first present a new fabrication process of downscaled graphene nanodevices based on direct milling of graphene using an atomic-size helium ion beam. We address the issue of contamination caused by the electron-beam lithography process to pattern the contact metals prior to the ultrafine milling process in the helium ion microscope (HIM). We then present our recent experimental study of the effects of the helium ion exposure on the carrier transport properties. By varying the time of helium ion bombardment onto a bilayer graphene nanoribbon transistor, the change in the transfer characteristics is investigated along with underlying carrier scattering mechanisms. Finally we study the effects of various single defects introduced into extremely-scaled armchair graphene nanoribbons on the carrier transport properties using ab initio simulation.