I can't believe there are people on here making these absurd claims that any sort of factory Honda of the era (or even within 10 years of it, barring the S2000 or NSX) could out perform an OEM E36 M3 in a race setting where the cars are within factory specifications in terms of power, suspension travel and alignment deviation tolerances. I've owned a myriad sports cars; 2 Porsche 944 Turbos and an S2, 1989 BMW 325iS, 3 Saab 9000 Turbos (1988, 1994, 1997), Audi C4 S4 (1993), and I've driven many more; I'm only 21. I do PCA DE events on road courses along with full-track timed AutoX events, and I've got lots of race buddies with every vehicle under the sun.
I don't want to discredit the FWD Japanese rice rockets, they're certainly less of a maintenance hassle than their euro counterparts, however I've had plenty of opportunity to drive in a large number of models with various levels of tuning from OEM to seam welded, caged, slicks, you get it. My friend, who owns a 1999 Acura Integra with some various exhaust, intake, damper and spring enhancements is regularly left far, far behind on friendly spirited driving through winding rural roads--by my 1997 Saab 9000 Aero with the suspension and output that the car was assembled with. The Integra is mostly likely, say 2800lbs, whereas the tank-like, wallowing chassised front wheel drive 9000 is closer to 3500. Why is this so? In this case it's the engine. The turbocharged 9000 provides so much torque all over the place that it's easy to just power out as you leave any apex. I would say I'm the more experienced driver, however he's plenty competent.
Now the E36 M3 combines not only the fat, more flexible torque of the 9000 with an incredibly stiff chassis for a sedan manufactured in 1995. Remember that Car and Driver called it the best handling car of the 1990s. It has almost perfect weight distribution. It's also rear wheel drive, so it has mere physics on its side when it comes to drivetrain-to-road energy transfer when driven ideally (which is a debate you will lose if you believe otherwise). I used to be all cocky with my 944 Turbos, believing they had everything that an M3 had, but with less weight, the ability to add 100 hp here and there with simple modification, fantastic 4-piston fixed brake calipers, and the same ideal weight balance. Then I actually drove a stock E36 M3 and was blown away. Where I'd be fighting to accommodate for all the variables the 951 throws at you, from chassis wind-up to feathering the gas whilst predicting the exact time when boost would come on in a corner to the curious moment of inertia, the E36 M3 made it seem as if I was on a sunday drive... at 120mph. I was stunned at how well the car communicated with the driver and represented inputs given to it.
Furthermore, each of my 944 Turbos completely embarrassed every Civic, Integra, what have you. I even bested an NSX at a track in northern Illinois. The only cars that can present a challenge are highly modified or of the new generation, such as Evolutions, STis, or my friends 1991 MR2 Turbo which runs on race gas, if that says anything. All that and I'd consider the E36 M3 several fold easier to drive fast.
I don't know why I feel as though this rant is necessary, however I just have a hard time watching people say things like "this compact front-wheel-drive coupe is faster than that purpose-built sports car" when I dust them off on freeway onramps with cars like a stock Saab. I know of very fast Japanese sport compacts, in some cases owned and driven by young, bright engineers who manage to wring 300+ daily drivable horsepower from a naturally-aspirated 1.8L engine, but these cars are modified extensively from the way in which they left the factory, and at that point it's useless to sit and compare which model is better, because the modifications at some point will always trump factory advantages.
I've often thought about getting an M3 Evo, just as a second car, seeing the price you can get them for! To add to the Integra debate, I used to have a dc2, and had a go with a e36 in a straight line, and it didn't gradually pull away, it completely nailed the Teg, and the Teg is my favourite of all the cars I've owned.
For people arguing about the twisty stuff, not all people are willing to push their cars to the limits on public roads for risk of something being just round the corner that you can't stop for! But dc2s are awesome cars!