During WWII water/methanol injection was used by both the Allies and Axis powers to increase the output power of their supercharged aircraft engines. By spraying a fine mist of a water/methanol mixture into the intake of these large engines, gains of 350-500hp were achieved. This allowed fighters and bombers to carry heavier loads at increased speeds. Water injection was also used in Formula 1 racing in the early 60’s but was quickly banned for adding to much horse power to the engines. It is also banned in NASCAR racing.
Water is able to absorb huge amounts of heat. In supercharged and turbo charged engines, heat is a major problem and inter coolers are used to reduce the heat of that compressed air. By spraying water into the air charge, the heat is absorbed and the air/fuel mixture becomes denser. Using a 50/50 mix of water and methanol, further heat reduction is possible with a substantial increase in octane because of the methanol. You can increase the octane rating 8-16 points which can save you money over buying higher octane gas