WWII - How did Germany build up it's Army?

After WW1, they decided to strip Germany of most of it's Army. How the heck did they rebuild their military under the eyes of the world. They had given the Germans a certain limit for their own defense. Did they not notice the modern military war-machines rolling out of the factories, the massive military parades. Or did they just hope Germany wouldn't dare try anything after the failure of WW1.