As said by Wikipedia: "
In vehicle racing, nitrous oxide (often referred to as just "nitrous" in this context to differ from the acronym NOS which is the brand Nitrous Oxide Systems) is sometimes injected into the intake manifold (or prior to the intake manifold), some systems directly inject right before the cylinder (direct port injection) to increase power. The gas itself is not flammable, but it delivers more oxygen than atmospheric air by breaking down at elevated temperatures, allowing the engine to burn more fuel and air and resulting in more powerful combustion. Nitrous oxide is stored as a compressed liquid; the evaporation and expansion of liquid nitrous oxide in the intake manifold causes a large drop in intake charge temperature, resulting in a denser charge, further allowing more air/fuel mixture to enter the cylinder. The lower temperature can also reduce detonation.
The same technique was used during World War II by Luftwaffe aircraft with the GM 1 system to boost the power output of aircraft engines. Originally meant to provide the Luftwaffe standard aircraft with superior high-altitude performance, technological considerations limited its use to extremely high altitudes. Accordingly, it was only used by specialized planes like high-altitude reconnaissance aircraft, high-speed bombers and high-altitude interceptors.
One of the major problems of using nitrous oxide in a reciprocating engine is that it can produce enough power to damage or destroy the engine. Very large power increases are possible, and if the mechanical structure of the engine is not properly reinforced, the engine may be severely damaged or destroyed during this kind of operation. It is very important with nitrous oxide augmentation of internal combustion engines to maintain proper operating temperatures and fuel levels to prevent preignition, or detonation (sometimes referred to as knocking or pinging)."
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