l have a '95 BMW 525i. There is a switch next to the gear selector that cycles the gear indicator on the dash through ''E,M,S''. l think the S is for sport, but it only comes on when the car is in 3rd or lower gear slot. Is M a manual mode?Does anyone know the exact functionality of these modes?

In the economy mode (E), transmission shifts are made at lower engine speeds to conserve fuel. In the sport mode (S), the shifts are made at higher rpm for better performance. In the manual mode (M), the driver can shift the transmission from gear-to-gear manually for performance driving, or to better suit conditions, such as starting in deep snow.

The guy above me summed it up.

l do not know how you manually shift in that specific car but in mine you hit the gear shift to the right or left or use the paddle shifter on the steering wheel

That button is for three things
You slide it up & that just puts it into regular automatic mode this is what mode its in every time u start the car

The M stands for manual mode. When u slide it down to M basically all it does is lock it into what ever gear u put it into. So start up the car put it in M & just shift to what ever gear u want. And the car will start out in that gear. While driving if u want to go to 3 (AND D but D is still the same as 3) 2 or 1 u just select that gear & the transmission shifts to that gear. Its just another ''steptronic'' manual shift system. Later car makers changed it to a ''cool'' name & changed the shifters to have a push up push down ability to shift the gears manually. Car makers did this because people simply could not handle using manual mode with the regular shifter, they were putting it in R & N by accident.

Sport mode can be used in D & 3 2 1. When u select sport it when it D it treats D as 3rd. All it really does is peek the RPMs to red line when ur foot is to the floor before shifting to the next gear. On that trans some other things happen but its boring stuff.

Note the manual mode only works with R N 3 2 & 1 There is no 4th or overdrive ability. Unless u get to 125-130 then the computer takes away ur control & goes into 4th & 155-160 it goes to OD or 5th..