"A filthy swine from across the pond has put a boat anchor of a Chevy in a BMW M3, the best -handling BMW ever!" is one way you could look at the car we're featuring today, but I prefer to say "Munich legend gets Motown refresh".
The car in question is owned by Kevin Byrd, co-host of a show in America called Two Guys Garage and an R&D engineer for Ford Powertrain by day. I'm guessing the latest Ford V8 engines were too tight a fit in the petite E30 bay, so he's used a 'crate' GM LS3 engine, which fits with millimetres to spare. The Getrag 'box has been given the boot in favour of a Tremec TR-6060 gearbox to help control the 510bhp this engine is pumping out. Now it may seem incredible to some but the rear diff is still essentially an M3 LSD item, albeit with carbon clutches and a 3.73 gearset.
I'm betting the handling hasn't been affected much either; the LS3 weighs 415lbs vs the S14 engine's 375lbs, not a weight you would want sitting on your chest for sure, but then again not one that will do too much to the handling balance. And no your eye do not deceive you, the famous blister arches are 2 inches wider than standard, necessary to cover the 8.5x18 and 10x18 BBS wheels.
Not so much an M3 evolution, more an M3 revolution; more in-depth info here.