German engineer, Paul Schmidt, working from design of Lorin tube, developed and patented a ramjet engine later modified and used in the V-1 Flying Bomb. The concept of the world's first jet-powered cruise missile was originated by Flight Staff Engineer Bree. The pulse engine was based on a French patent dating to the 1890's. The engine, which operated by creating 500 fuel-air explosions per minute, was designed for a specific operational altitude. The guidance system consisted of propellor in the nose. When this had turned a preset number of times (corresponding to the desired range to the target), the counter pushed the missile's rudder hard over, resulting on a dive to the ground. A V-1 could be produced for one tenth of the cost of a V-2.

Nebel contacted the German Army and proposed the use of liquid fuel rockets as war missiles. He arranged for Army representatives to observe a demonstration launch at Kummersdorf. Riedel and Von Braun prepare the rocket, which was 3.5 m long and 10 cm in diameter, had a gross lift-off mass of 20 kg, an empty mass of 10 kg, and a thrust of 60 kgf. The new design featured the engine forward of the stack, followed by the liquid oxygen tank, then the alcohol tank, then the manometers and other elements of propellant pressurisation. The new-design engine was developed by Walter Riedel and Arthur Rudolph at the Heylandt Company. The rocket reached an altitude of 20 to 70 m before veering horizontally into a forest. An exhaust velocity of 2000 m/s was expected, but only 1700 m/s was demonstrated.. The Army is seemingly unimpressed. However a month later they hire Von Braun, who drops out of sight.

Wernher von Braun joined the German Army Ordnance Office rocket program at Kummersdorf. He is working on a 300 kgf thrust liquid propellant engine, which has been tested with an exhaust velocity of 1700 m/s, but it is believed can be tuned up to as much as 1900 m/s. This is to power the A1 rocket, which is to have the same tractor configuration as the 20 kg test rocket launched in August 1932. The main issue is how to solve the problem of keeping the rocket stabilised in flight, as the August test demonstrated. The A1 is to be 1.4 m long x 30 cm in diameter, a 150 kg gross takeoff weight, and 40 kg of propellant., allowing a 16.5 second burn time.

Following an aborted attempt on 29 September, Winkler launches his HW-2 rocket from Pillau on the Baltic. He had worked for months at the Raketenflugplatz developing the new device. However on launch day an explosive propellant mix developed in the internal compartments of the rocket, and after igniting and rising only 3 m, it was blown to smithereens.

As the influence of Nazism in German Society increases, the VfR disintegrates in political disputes and withdrawal of funding by its wealthiest backers. In this period it occurs to Riedel that alcohol may prove a better fuel than gasoline - primarily because as a fuel it needs much less of the expensive and difficult-to-handle cryogenic liquid oxygen. Experiments determine that 60% alcohol to water is the best fuel mixture, and for the first time use the fuel to cool the combustion chamber before leading it into the chamber - regenerative cooling.

Mengering, an engineer working for the city of Magdeburg, is entranced by the theories of Peter Bender, who proposes that the people of the earth are in fact living on the inside surface of a hollow sphere. He believes that this can be proven. A rocket fired vertically from Magdeburg should impact south of New Zealand. Mengering convinces the city authorities to fund experiments leading to this objective. Nebel, now a member of the Nazi Party, obtains a contract of 25,000 Marks for the first step. He will build a rocket that will carry a man to an altitude of one kilometre, from where the pilot will bail out and return to earth by parachute. The rocket is to be fired on 11 June 1933 in a huge event publicizing the city. The Pilot Rocket would be in the form of the VfR Repulsors, with the passenger in a bullet-shaped fairing over the engine compartment, and the propellants being stored in two long cylindrical tanks trailing the engine. It was to be 7.6 m tall and powered by an engine of 600 kgf. A prototype was to be built first, 4.6 m tall, powered by a 200 kgf motor. This would not be capable of carrying a pilot, but would have a parachute for recovery.