I have found very little that pertains to how the German nazis saw Hungarians in the racial hierarchy. It is most likely that there never was any motivation to classify them, for several reasons.

First, Hungary was never occupied by the nazis (in the social occupation sense, where administration was taken over by Germans, military occupation did happen when the arrow cross party was installed), nor were there any plans for this (other than vague threats that I'll talk about later). This meant that within the legal framework of the German State, Hungarians were such an overwhelming minority (with only a tiny population existing in Eastern Austria) that they didn't warrant legal classification, unlike the nationalities in various occupation zones, protectorates, and reichskomissariats.

Second, the Hungarian fascist movement, hungarism, was to a large extent a mimicry of German national socialism. It therefore had its own race theory, although this is claimed by contemporary sources to have been based more in sociological than biological factors. I was unfortunately unable to find the transcript of the trial of the leader of the Hungarian nazi movement, however I do know that he explained the race theory of his movement, even stating that according to its classifications "[he is] a hybrid and [his] wife is a bastard". This race theory was not entirely in agreement with that of the nazis and concentrated on the carpathian basin. The core of the movement was also in disagreement on a fundamental scale with the nazis (on the economic platform) but was nevertheless installed to keep Hungary on the axis side when the previous government had attempted to sign an armsticise and join the allies.

Interviews conducted during the trials of Hungarian war criminals also had interesting information to offer on the relations between Hungary and Germany, which may potentially shed some minimal light on how the nazis could have potentially seen the Hungarians. One prisoner asserted that when the question arose on the Hungarian participation in the invasion of Yugoslavia (who had only days prior signed a treaty of eternal friendship), the Germans had threatened to "deal with Hungary in the same way as Poland". It is therefore possible that Hungarians weren't classified negatively (or at all for that matter) simply due to their political alignment with the Germans. This, however, is speculation.

If I've missed any facts about the nazi outlook on Hungarians, please let me know. My reply was based on Hungarian sources I was able to find.