A Yarrawonga man facing charges of gun and commercial drug trafficking was allegedly involved in a shootout at his home after a gun was held to his partner’s head, a court has heard.

The 37-year-old faced Wangaratta Magistrates’ Court from the Metropolitan Remand Centre looking to be bailed last Thursday.

The court heard a covert police operation was conducted over 12 months looking to uncover alleged serious offending related to drug dealing and gun trafficking within Wangaratta and Cobram.

Wangaratta Detective Sergeant Chris Hill said the operation involved undercover operatives who purchased seven firearms and a large quantity of methylamphetamine off the accused between February and April this year.

The man was charged with profiting with more than $45,000 off the alleged criminal dealings.

The 37-year-old was allegedly involved in a shootout at his Yarrawonga home in Warrick Street on 5 March earlier this year.

The court heard the accused allegedly told an undercover policeman a gun was held to the head of the 37-year-old’s partner outside of his house by a man known to police.

After being overpowered and disarmed, the man allegedly left and returned to the accused's home a short time later with three others and shots were fired.

Det Sgt Hill said police were unsure who fired first, but nearby CCTV captured four or five shots discharged.

The 37-year-old is charged with discharging four rounds from a shotgun, with one of the shots allegedly impacting a neighbour's house.

Defence counsel Chris Terry said his client’s involvement in the shooting was an act of self-defence.

The accused has been in custody since his arrest in Cobram on 7 May.

He was arrested with four others, including his partner and two Wangaratta men as police seized more than $1 million worth of drugs and 18 firearms from North East streets.

Det Sgt Hill said one of the Wangaratta men was an associate of the accused while the other Wangaratta man faced similar charges unrelated to the alleged offending of the accused.

The defendant's father and his partner’s mother appeared in court on Thursday in support of the 37-year-old.

The court heard the man worked in counter-terrorism operations with the army for four years before becoming involved in drug use and a long-standing battle with PTSD.

His partner’s mother offered to house the accused if he was granted bail, saying he was like family after reconnecting her with her previously estranged daughter.

“Sadly I think this was the wake up call he required,” she said.

The court heard the defendant's partner also lived at the Cobram address and a $100,000 bail surety was offered.

The bail bid was put on hold after a lunchtime adjournment, as the court heard the defendant's partner had been arrested in NSW, which Mr Terry said brought the viability of bail into question.

The accused is due to return to Wangaratta court for committal mention on 15 January next year.