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The Nicaraguan Democratic Union (UDN, Unión Democrática Nicaragüense) was founded in late 1980 by José Francisco Cardenal, an early leader of the anti-Sandinista rebel movement that became known as the Nicaraguan Contras. The UDN was based in Miami, Florida among its growing community of exiles from Nicaragua's middle class. It established an armed wing, the Nicaraguan Revolutionary Armed Forces (FARN, Fuerzas Armadas Revolucionarias Nicaragüenses).
The UDN attracted interest from the steadfastly anti-Sandinista Reagan Administration, and also received limited funding from Argentina's military junta. However, they conditioned further aid on the UDN unifying its efforts with those of former National Guardsmen who had served the Somoza regime.
Cardenal accepted, creating a merged organization, the Nicaraguan Democratic Force (FDN). Dissenters broke away over the issue and continued to call themselves the UDN-FARN. The FDN would grow into the dominant Contra organization, but Cardenal himself soon fell out of power after alienating his allies in the Contra movement. The breakaway UDN-FARN, under Fernando "El Negro" Chamorro, remained a small force throughout the war.