I would guess that maybe you may have cooked it too far? Try calibrating your thermometer for accuracy.
The cut of meat used to make jerky also helps to dictate the level of toughness in the finished product. Slicing the meat against the grain it will produce a product that is a lot easier to chew; whereas cutting with the grain will make it more difficult to chew. The thickness of your slices also has an impact on the final product.
Obviously there is no concern about marbling especially with eye of round. If your cutting it across the grain it should be fine. You don't want marbled meat as fat can cause rancidity in jerky. Eye of round is perfect.
I cold smoke for 1-2 hours (no heat), then raise the smoker temperature to 115° - 125° and smoke until dry but still slightly pliable. When dried the jerky is folded, it will leave a distinct white line, but will not break.
If you are using a higher temperature because you don't use a cure; consider adding a cure and smoke at a lower temperature to only add smoke flavor and dry the meat. Also marinating the sliced meat overnight helps the salt in the marinade to de-tangle some of the proteins, making it a little easier to chew in the end.
Some will tell you that a curing agent isn’t needed to make jerky; this may be true in cases where the jerky is cooked, and not smoked, then dried at a low temperature. But cooking the jerky also changes the texture and the flavor. Cold smoking creates the perfect environment for food-borne bacteria to grow; low temperature, moist food, and the smoker creates an oxygen free environment. A cure is required whenever food is kept between 40° and 140° for a few hours. Once the jerky is fully dried, there won’t be enough moisture to support bacteria growth.
Lastly if you cook the meat in a hot smoker, the cooking tightens up the proteins, making the meat slightly tougher to chew. Rather than having the smoker hot enough to cook the meat, try to smoke and dry it at a lower temperature to prevent the proteins from binding together and tightening up.
The finished product should be stiff, but should not break when folded in half. When folding, it should create a distinct white line where it was folded without breaking.
