ARMED police swooped on Bridport following reports of a knifeman threatening people.
Residents told of a huge police presence - including seeing armed officers - in the Skilling area on Sunday.
Police say a man has been arrested.
The incident was reported to have taken place outside Skilling Stores on Alexandra Road, at around 5.30pm.
A person was reported to have verbally threatened a group of people outside the shop whilst brandishing a knife before walking way.
One eyewitness described seeing a heavy police presence at Princess Road on the corner of Alexandra Road.
"A police van, unmarked black BMW and two police cars all pulled up within a few minutes of each other," the eyewitness said.
"One officer appeared to be guarding the alleyway to St Mary’s Park."
A spokesman for Skilling Stores said that staff members at the store on Sunday were unaware that an incident had transpired until being informed by police.
A Dorset Police spokesman said: "Officers made enquiries in relation to an incident that was reported to have taken place outside Skilling Stores in Bridport. It is alleged that a man verbally threatened a group of people while brandishing a knife before then walking off."
The spokesman added: "A 33-year-old man from Bridport was later arrested on suspicion of possession of a knife blade/sharp pointed article in a public place. He is helping officers with their enquiries."
Councillor Ian Bark, mayor of Bridport, said: "It is a huge shock to think that this could happen on a Bridport street.
"However, as shocking as it is to think of someone wielding a knife in Bridport, knowing that we have police available with the appropriate level of ‘personal security’ is hugely reassuring."
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