Knifemaking Equipment
Whether you forge or use stock removal, there is a minimum amount of equipment you'll need - and less of it than you might think.
The essentials
For forging you will need a heat source (forge), anvil, hammers and tongs. Regardless of the method used to produce your blades, there will be some removal of excess steel - at its most basic, this can be accomplished with files. A belt grinder speeds the process considerably. Forged-to-shape blades have less stock to remove, since the shape, distal taper and bevels are put in with a hammer. A good bench vise is a wise investment, and drills and some sort of saw will certainly come in handy - manual or powered.
For finishing the blade you can use various grits of wet-and-dry sandpaper; a good satin finish can be attained with a bit of practice. Epoxy will be necessary to attach the handle.
What was in my shop
The equipment in my forging shop: a home-made gas forge, post vise, 150-lb Peter Wright anvil, 25-ton hydraulic press, assorted hammers and tongs, and vermiculite in a large container for annealing blades (annealing softens the blade so it can be ground and filed). I used an arc welder to put together stock for my Damascus, and the hydraulic press to make the Damascus steel itself.
My finish shop contained two grinders (a variable-speed Burr King and a Wilton Square Wheel), metal- and wood-cutting bandsaws, a bench vise, fluorescent and incandescent lighting, and various tools and jigs - labor-saving devices.
There are shops with a lot more equipment - mills, lathes - but I did just fine in mine.