My understanding is that you have to be a class II to build a gun.... is this only to build a gun you would want to sell?
You do not have to have ANY license or do any specific thing in order to build a gun -- or MANY guns -- for your own use. Provided that those guns fall under Title I of the National Firearms Act of 1934. So Rifles, Pistols, Revolvers, and Shotguns are all fine.
If you want to build guns for sale to others you must hold a "Type 07" Federal Firearms License. These still must be "Title I" firearms.
If you want to manufacture or sell Machine Guns, Short Barreled Rifles, Short Barreled Shotguns, Suppressors, AOWs, and Destructive Devices, you must be the appropriate kind of SOT dealer.
Here's the breakdown on various types of Federal Firearms Licenses and Special Occupational Taxes:
A Class 3 SOT dealer is a dealer of NFA firearms
A Class 2 SOT manufacturer is a manufacturer of NFA firearms
A Class 1 SOT importer is an importer of NFA firearms
Type 1 FFL is a Title 1 dealer or gunsmith
Type 2 FFL is a Title 1 dealer doing business as a pawnbroker
Type 3 FFL is a licensed collector of Curio & Relic (C&R) firearms
Type 6 FFL is a licensed maker of ammunition and reloading components other than Armor Piercing ammunition
Type 7 FFL is a Title 1 manufacturer of firearms, ammunition and ammunition components other than NFA, Destructive Devices and Armor Piercing ammunition
Type 8 FFL is an importer of Title 1 firearms and ammunition
Type 9 FFL is a dealer in Title 1 firearms including NFA destructive devices, but no other NFA
Type 10 FFL is a manufacturer of Title 1 firearms, ammunition and ammunition components, including NFA Destructive Devices but no other NFA, and not including Armor Piercing ammunition
Type 11 FFL is an importer of Title 1 firearms, ammunition and NFA Destructive Devices, but no other NFA
In either case I would rather have as many of the parts done for me as possible, and think using an AK74 action and replacing everything around it would maybe be the best way to go... or maybe not..
Yup... That seems to be the focus of most of the thread.
I'll have to look into the legality of some things here...
The basics of it have been pretty well explained here. If you really stray far from the basic operation of the firearm you've chosen to hack, you may want to submit an official letter to the Tech Branch of the ATF for a declaration of the legality of what you're trying to do.
One thing to remember, that I've not pointed out before: If you start with a RIFLE, you may NOT make a pistol out of it. (Specifically, out of the serial numbered receiver that *IS* the rifle.) If you want to do a pistol build, you'll need to begin with a receiver that is sold as a pistol or stripped receiver. Once it's been made into a rifle, it cannot be made into any other configuration less than 26" over all and with a barrel that's less than 16" long. This is direct wording out of the original NFA. If you want to build a pistol on a receiver that was EVER a rifle, it will have to be registered as a Short-Barreled Rifle. Now, building AKs from parts kits, or modifying them this heavily is generally going to require a new sheet metal receiver shell anyway, so this isn't that big a deal, but it is something to watch for.
Thanks for bearing with me guys. I"M LEARNING!!!!
Surely!
But as long as my barrel fits my bullets, and the rear part of the gun is strong enough, what could go wrong? Thats why I wanted to go with a piston operated, less modification does mean safer....
Hmmm, what could go wrong? Maybe: it won't ever feed because the mag is not matched in design or position to the breech, ammo isn't the right shape/size to reliably get where it's supposed to go, the gun won't cycle because the gas volume/pressure produced by the pistol round is not anything close to that produced by the rifle round the gun was designed to fire, and a couple of other minor points.
It all seems "simple" when the system is assembled and functioning. It is not simple, though. An AK isn't something that Mikhail Kalashnikov built one afternoon on his kitchen table out of a car axle and a tree branch. Everything is balanced and calculated and carefully designed to work together and handle specific stresses. Muck around with one bit and you throw off something else.
Can you get it to work? Surely. With enough time, money, and a few prototypes.
I dunno. Maybe this IS a crazy project. But i've learned so much from when I started, and I feel like if i just think more and harder, I could figure it out.....
Well, I'm sure that you can. But no body here wants to see you end up with an expensive pile of scrap, or a dangerous gun, or something that kind of works but is monstrously unsatisfactory.
It may be a long road. Spend as much time as you can researching this on AKFiles.com and
www.weaponeer.net. Those fellows have done this many times over and can at least tell you how much effort such a conversion is for professional gun plumbers.
Good luck!
-Sam
Seeing this tutorial on manufacturing an illegal (at least as I see it), home-built pistol (much less a rifle that is closer to your face) out of sheet metal, aluminum, and thin flat stock is extremely dangerous. Proceed with the utmost of caution. Honestly I want nothing to do with it...as it is a good way to meet your maker. 
