increase torque/horsepower??

I'd vote for a 3.5 transplant is the first step, it's a cheap boost in torque. After that, definitely forced induction, and specifically to the M30, a turbocharger. You could spend twice the cost of a TCD system in engine mods and not have as much power, nor any more reliability. Of course, for a CSi you would want to ditch the D-jet before you turbo and use MegaSquirt or Motronic.
 
Forced induction is most definately the way to go the only downside is that if you turbocharge you lose some of the exhaust note. Here in the U.K. there is a magazine called Practical Performance Car in the magazine one of the writers(Toby Una) has turbo'd a B35 M30 in a E30 using a new Megasquirt ECU and everything else was second hand from breakers yards or Ebay. The total cost was probably well under £1000 and the net result was 330 BHP at the wheels!
 
Oh dear.

Don't ask that question. One of the first answers that you are going to get is Ye Ol' 3.5 engine transplant.
 
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