E36 loss of power top end cont'

I just checked the speedo and it works fine, so thats not it. While under the car I noticed a plug dangling down. Its comes from the engine its coupled with the oxygen sensor, it looks to end before the O2 sensor, I cannot figure where it plugs into or what it is. My manual doesn't mention it. Does anyone know what this is. Again it runs with the O2 sensor but breaks out of the plastic cover and the o2 sensor continues. Puzzled!!

The plug you describe connects to the side of the tranny near the top. I forget which side, but you can see it from underneath.

Yes, its the reverse light plug. Another thing eliminated. Fuel pressure reg is my next area. Getting codes read this week.

Check the air mass sensor??