Armed police surrounded a property in Bideford for over six hours after they received a call about firearms.
Police arrived at Stella Maris Court at 6pm and cordoned off the area until after midnight on Tuesday last week.
Police confirmed they arrived at the scene having received a call saying firearms were in one of the properties.
They searched the property but found no firearms, and confirmed no crime had been logged.
Ellen Wilton, who lives across from the property being searched, said people living in the area thought the incident was to do with drugs.
She said: "All we know is that there were several police down there. I saw four of them go into the house. We all heard it was to do with drugs.
"When my husband went to take the dog out at 9pm the police said he couldn't as the whole area was cordoned off.
"I saw two little children being carried out of the property in a duvet. We didn't hear anything though it was all very quiet."