LSD Question

[sprintevo]

Just bought a used E12 M535i LSD - it has a small canister connected to the top of the diff and what seems like a drain going back into the side or perhaps the other way around. Not sure if it some kind of breather or cooler - if a cooler is there a pumping mechanism inside the diff? just wondering if I have stumbled across a competition diff or if this is stanard for the E12 M535i

 

[M5dCS]

diff cooler

What you have is an oil cooler for the diff. As the gears rotate the oil is slung upward off the ring gear into the tube, carries on into the tank and drains back down into the diff close to the pinion gear, all the while having cooled. This was used on M535's and early 6 series and is not a racing diff. I've got this setup with 3.07 gears and limited slip in my coupe with an M5 turning it and it's just fine. Good luck with it, Leroy