It sounds like the engine was modified to increase its compression ratio, which does increase horsepower but it also requires a higher octane gas. You can buy racing gas (such as VP fuels) from the local bike shop, or you can go to the local general aviation airport (the small, private planes) and buy some aviation gas which is 100 octane or more.
If you are serious about racing then it is probably a reasonable bike. Just remember that the performance modifications come with a price: Higher gas costs, harder to start, and more likely to seize. It will make the bike faster though.
Rod