The Luftwaffe is the generic term for the German air force. It is also the official name for two of the four historic German air forces, the Wehrmacht air arm founded in 1935 and disbanded in 1946; and the current Bundeswehr air arm founded in 1956.
The Luftwaffe first saw action in Spain during the Civil War, before war broke out in Europe. While other air forces chose to use their bombers for attacking enemy cities, the Luftwaffe used its bombers to support the army, bombing air fields, railways supply convoys and even attacking enemy positions. These attacks proved devastating and saw the rapid defeat of Czechoslovakia, and the Low Countries.
Although the Luftwaffe supported the army, it also engaged in strategic bombing. Its bombs shattered cities such as Prague, Rotterdam and Paris; it was reported that on some bomb runs the Luftwaffe specifically targeted Jewish districts.
As the war developed into two fronts, the Luftwaffe was forced to split their limited resources between the Soviet Union, France and then later England in retaliation for the RAF bombings of German cities. This greatly reduced their effectiveness in the advance on Paris, which in turn led to the Luftwaffe being unprepared to counter the RAF during the Allied counter-attack.
By the war's end, the Luftwaffe had a mixed reputation among Race pilots. While they considered the Germans to have the most dangerous aircraft, they weren't considered as tough an air force as ether the Americans or the more formidable British.