It is at the wheels. think about it:
a 95 325i is 3400 lbs and has iirc 180hp. Yet they do 0-60in 6.7 seconds? Not if it is at the flywheel. My second pic worked earlier when I posted it. go to:
http://mikemarsh.20megsfree.com
and check out my links page. 394hp stock dynoed at the wheel hub for the m5.

95 SE Modded - Gone 98 E0 Black SVT - Gone 98 se sport - Broken 00 T-Red SVT - Nice