Toronto police conducted two more raids in the city's Entertainment District Monday afternoon after an overnight drug bust that led to dozens of arrests inside a nightclub.

Investigators told CTV Toronto they found some guns and a quantity of drugs inside two homes on Adelaide Street. The homes were allegedly being used as stash houses by drug dealers selling narcotics in the club district.

Police conducted their first raid down the street from the houses at Club 338 on Adelaide St. W. near Peter Street at about 4 a.m. on Monday.

The raids are connected and come at the conclusion of an investigation into drug trafficking that started in May, authorities said.

Staff Sgt. Brown of 52 Division would only tell CTV.ca that "upwards of 20" people had been arrested inside the club, but said few details were available beyond that. About 300 people were in the club at the time but Brown wouldn't say how many were still being held by police.

Police seized a quantity of drugs, including vials of ecstasy laced with crystal meth as well as cocaine. Investigators allege the drugs were being sold openly and that patrons were doing drugs out in the open.

One investigator said he had never seen as many drugs on display at a club in his entire career.

Authorities allege that some of the more addictive drugs were being given away for free, knowing that users would soon come with money asking for more.

"We're concerned with drug trafficking here in the Entertainment District," said an officer at the scene. "We've known about this premise for some time now. We started our investigation and are concluding it today."

Officers from the Emergency Task Force were also seen carrying cardboard boxes, bags of $50 and $100 bills and computer hard-drives, the Toronto Star reported.

Early Sunday morning, about a block away from the club, police hauled seven people out of a limousine following a shootout earlier in the night.

Police found a semi-automatic handgun in the limo. A 21-year-old man was charged with a number of firearms-related offences.

The others also face weapons-related charges.

Police patrols of the entertainment district have recently been beefed up.

Despite the violence and the discovery of drugs, police say the area is still safe and that most of the people who frequent the club district are just looking to have a good time.

With a report from CTV Toronto's Dana Levenson and Jim Junkin