I have been a knife freak ever since my dad took me to my first gun and knife show in a stroller. After 27 years of feeding the addiction I am ready to start turning out my own blade, or at least attempt to. Right now I am just looking at the stock removal method. I know I need to tool up for this endevour and am looking for some guidance as to what I should buy. I have a budget of about $400 for tools and all I have at the moment is a dremel and a good hand drill.
Any help is appreciated.
1 bastard mill file, flat, large, with safe edge
1 second cut or smooth mill file, flat, large, with safe edge
1 bastard cross cut file, half round, large
1 second cut mill file, half round, large
1 round file, small
1 triangular file, small
Buy good Nicholson files or like that, not the crappy chinese stuff. The files should be of W1 / W2 tempered steel, not case hardened.
The fine thing is that, when they get too worn for use, you can get great knives out of them!
1 bench vise (the machinist kind), the heaviest and sturdiest you can get. Don't spend less than 50$ on that! (and that's already far too cheap) It's for life, so buy one that will last you a life. Get a good american or european made one. Avoid chinese or russian crap.
1 working bench. If at all possible, get a wooden framed one, not metal. The bench should be FUCKIN' HEAVY. If you find it "heavy enough", then it isn't.
Prepare to spend at least 200$ on that.
If you know somebody who can spare you a working bench, take it, and spend at least 30$ in a wine store to thank hima, or, if you are the religious type, in your local church, temple, mosquee or what else in blessings upon him, his house and his family

.
A good bench, apart from a good anvil, can be the hardest thing to get.
If you have to cut something, at least initially you can use any old table, reinforcing it with some iron L profiles or wood planks, but your results will improve greatly with a steady, solid working surface.
1 Drill press. This is actually, together with the bench vise, the only essential tool you can't do without, and will be the single most used power tool in your shop even when you'll get a grinder, band saw and even power hammer.
Get the best you can afford.
Get it heavier than you think you need, if at all possible.
Get a good american or european made one, avoid chinese crap.
2 glass blocks, 1" x 2" x 4", to glue sandpaper on.
4 wooden blocks, 3" x 3" x 5", for the same use
Sandpaper, 400, 600, 1000 grit.
A sharpening stone, at least 2" x 5" in surface. 300 or 500 grit. No finer than that.
1 soft firebrick, to be hollowed out in an oval cavity, with 2 tangent holes, upward slanted, for the burners.
Some iron wire, to hold together the firebrick that will crack at first use.
2 MAPP gas burners.
1 old .50 ammo can.
1 gallon 5W30 motor oil, or hydraulic oil
With this, you can stay within your 400$ budget and start making knives.
A grinder will greatly benefit you, but isn't essential. You can make great knives by hand.