Hungary finished the WW1 on the losing side, lost significant territory, manpower and resources. Due to the implementation of the Peace Treaty the existing arms industry and the Armed Forces were seriously limited. From the beginning the arms industry and the Armed Forces secretly retained capacities which were over the limitations. From the beginning of the 30s the enlargement and modernisation of the Armed Forces started. Hungary was an agricultural county with limited heavy industrial assets, but it was a solid foundation to modernise and produce infantry weapons and artillery. First, it based on the modernisation of the WW1 weaponry inherited from the Austro-Hungarian Army. Later, licences were purchased and put into production. During WW2, the Hungarian industry was able to supply the Army with all kinds of small arms and artillery weapons, however, not all were modern designs. A significant number of German and captured weaponry also purchased by the Hungarians.