Military interest in a submachine gun was late in Czechoslovakia, but by the late 1930s a development program was put into place. Interestingly, the main use case for an SMG was seen as being a replacement for a rifle-caliber LMG in fortification mounts. The thought process seems to have been that a large volume of fire was the necessary element to keep invaders away from border fortresses, and the ballistic power of the fire was not so important.

The vz38 was designed by František Myška, chambered for the 9x17mm (.380) cartridge used by the vz22/24 pistol then in service. It was tested against the ZB26 light machine gun. It proved reliable and effective, and it's 96-round drum magazine (copied format he Finnish Suomi) was a particularly nice element. An initial order was placed and the gun was formally adopted into service, but production never began. Instead, German occupation of the country put an end to the project and only 20 preproduction examples were ever made.

Many thanks to the VHU - the Czech Military History Institute - for giving me access to this very rare example to film for you. The Army Museum Žižkov is a part of the Institute, and they have a 3-story museum full of cool exhibits open to the public in Prague. If you have a chance to visit, it's definitely worth the time! You can find all of their details (including their aviation and armor museums) here:

https://www.vhu.cz/en/english-summary/