I've inherited an old beaten up mc21 SE and should be rebuilding the engine in a week or so.

I plan to change the pistons, rings, reed valves and things of that nature.

I have read through the tuning page and I am quite happy cleaning up the ports and matching them to the case, however I have one question regarding mods to the case its self. I have seen that there is some machining that can be done to F3 specifications: http://www.nsr-world.com/performance/
Could someone please tell me what that is, what needs to be done and what does it do. Sorry, I couldn't find anything using the search function.

I have a new mechanic friend here in jp, and he recomends getting an nsr over an rgv250. Hey says it is easy to get 80ps out of them... is he pulling my leg? He and his friends used to race nsr250s in the 90s and 2000's. He still has his track nsr, though I have never seen a dyno print. Just want to know if 80ps is doable.

Thats all

80ps might be a little optimistic. They can make between 70-75ps though. If you want more than that you need to be looking at Honda RS250's.

A good well sorted motor will make to 68ps. More than that will require quite a bit work as well as a number of parts, eg HRC crank, cases, ignition etc.

65ps is more normal for your average MC21 with normal race modification.
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If I have to take the carbs off once more...