stang newbie

Ok so i am a mustang newbie always owned jacked up trucks so forgive me if anything i post seems retareded or has been asked before, well here goes i just bought my first mustang its a 1995 gt with the 5.0 and i have 1500 dollars to spend and the motor runs fine although it seems to lack compression and has a bit of hesitation until about 3000 rpm i am looking to either rebuild the motor but i dont want to keep it stock so my question is if anyone could fill me in on how to rebuild this motor but also put a little more power to the wheels all the while staying at $1500