I have come across this when I was reading wiki about the 13th SS Division. It basically explained that the Germans did not persecute the Croats and Bosnians like other Slavic people because they believed these peoples were not Slavic at all but had Gothic and Persian ancestry and were thus racially superior to their balkan neighbours.
I did some more googling and came up with this.
British scholar Noel Malcom in his book "A short history of Bosnia" printed in Britain offers valuable research about the racial relationship between Iranians and some ethnicities of the former Yugoslavia. He writes: "The name Croat, or Hravat in Serbian, is not a Serbian word. It is similar to the Iranian name Choroatos, found on tombstones of Greek dwelling regions of south Russia." He goes on to add that the original form of the word is "Khoravat" as mentioned in Avesta, meaning "friendly".Historical studies indicate that the Croats started migrating from the Iranian homeland to Croatia, Serbia and Bosnia about 3,000 years ago. However, a much larger migration took place about 1,700 years ago. Probably the reason behind this migration was the suppression of the followers of Manichean faith during the Sassanid eraAlso the flag of Croatia has a chess board in it supposedly representing the Grand Master at Chess Bozorgmehr.Noel Malcom says that new theories confirm historical knowledge. Some Croatian nationalist theoreticians have opted to adopt the theory linking their origins to Iran, thereby preserving their cultural and psychological independence, in order not to merge into the neighboring cultures. Such a theory gained particular popularity during World War II, for Iranians were considered to have a higher ranking compared to the Slava in terms of racial hierarchy.
http://www.iranchamber.com/culture/a...ian_origin.php
Dunno how trustworthy this website is but it certainly is an interesting theory.