Two teenagers have been arrested after allegedly sexually assaulting a resident during an armed break-in in Cairns.

A group of three boys allegedly broke into a home in Manunda about 3.30am today and threatened the residents with a knife while demanding property. 

Police alleged two of them took a female resident into a separate room and sexually assaulted her.

The trio then allegedly ran from the scene.

Police were called in and, with help from the dog squad, located and arrested two boys at the nearby McCormack Street about an hour later.

They remain in custody and are being questioned by police.

The third boy remains on the run.

Police believe the boys do not know the residents of the home.

A crime scene has been declared and investigations are continuing.