Need to know how to set the timing

Cylinder #1 set at TDC, compression stroke. Cam marks level with head, aligned with mark on cover, or if unclear where to mark the cam: SET Cam at point where intake valve has just closed and both valves are shut on cyl. #1, cam gear marks should start to appear more clearly to technician, along with corresponding alignment points. This is ballpark. Remember, on clockwise rotation, after cylinder #1 intake valve(s) are shut, the cam will continue to rotate 90 degrees and come to rest at a position in which both exhaust and intake valves are at their maximum lash point. (the most play) Hopefully if you get this close, you will decipher the marks that exist on your Bavarian machine.

Http://www.bimmerwerkz.com/forum/3-series-e36/m40-motor-timing-info-59059.html is marking line up no nothing can go wrong