SANDAKAN: Police found 30 live bullets, three spent shell casings and a sword from a house at Kampung Mangkalinau here on Tuesday.
Sabah Criminal Investigation Department chief Datuk Salehuddin Abdul Rahman said two Filipinos were also arrested during the 1.30am raid.
The man, 33 and his daughter, 13, will be remanded until Monday to assist investigation.
The man, who is jobless, tested positive for drugs.
Police are still probing whether he is linked to any militant groups.
The case is being investigated under Section 8 of the Arms Act 1960.
Yesterday, police had rubbished social media claims that Abu Sayyaf members had been arrested in Kinabatangan.
The viral message had claimed the said two militants, who escaped the Philippines government offensive against Abu Sayyaf, had surrendered themselves to the police.