The car you raced probably had supercharger. A basic supercharger kit makes 290-350 to the wheels on the e36A stock e36 only runs high 13-low 14s stock. Superchargers usually knocks a second of the 1/4 mile with 107-110 traps(these cars are pigs wieghing in at 3100ibs).
It could have been turbo, but turbo kits are rare/expensive. The kit thats availabe makes anywhere form 320-600 whp.
I got 96 m3 and vortech kit that I'll install as soon as my mirage gets sorted out so I can use it a daily driver.
BTW
Here is a video of a street driven e36 turbo that runs 10.07
http://m3turbo.serveftp.com/movies/M3_Hammarstrom.mpeg
more info at
www.m3turbo.tk