Towards developing precise microsurgery tools for the clinic, we previously developed image-guided miniaturized devices using low repetition rate amplified ultrafast lasers for surgery. To improve the speed of tissue removal while reducing device diameter, here we present a new 5-mm diameter device that delivers high-repetition rate laser pulses for high speed ultrafast laser microsurgery. The device consists of an air-core photonic bandgap fiber (PBF) for the delivery of high energy pulses, a piezoelectric tube actuator for fiber scanning, and two aspheric lenses for focusing the light. Its inline optical architecture provides easy alignment and substantial size reduction to 5 mm diameter as compared to our previous MEMS-scanning devices while realizing improved intensity squared (two-photon) lateral and axial resolutions of 1.16 μm and 11.46 μm, respectively. Our study also sheds light on the maximum pulse energies that can be delivered through the air-core PBF and identifies cladding damage at the input facet of the fiber as the limiting factor. We have achieved a maximum energy delivery larger than 700 nJ at 92% coupling efficiency. An in depth analysis reveals how this value is greatly affected by possible slight misalignments of the beam during coupling and the measured small beam pointing fluctuations. In the absence of these imperfections, self-phase modulation becomes the limiting factor for the maximum energy delivery, setting the theoretical upper bound to near 2 μJ for a 1-m long, 7-μm, air-core PBF. Finally, the use of a 300 kHz repetition rate fiber laser enabled rapid ablation of 150 µm x 150 µm area within only 50 ms. Such ablation speeds can now allow the surgeons to translate the surgery device as fast as ~4 mm/s to continuously remove a thin layer of a 150 µm wide tissue. Thanks to a high optical transmission efficiency of the in-line optical architecture of the device and improved resolution, we could successfully perform ablation of scarred cheek pouch tissue, drilling through a thin slice. With further development, this device can serve as a precise and high speed ultrafast laser scalpel in the clinic.