what t do for performance

I am new too engines im very mechanically inclined so i can do most things no hassle with a little guidance.
I am building my 1989 dodge ram d-100 4wd into a torque machine. something i can boil the tires off and have the power to go threw rocks snow mud you name it. so im trying to find the best route to go.

heres what i have at my disposal

a burned up 727 transmission needs rebuilding
a spare 318 engine with good heads intake and tbi
a 318 block that needs to be rebored to run

currently in my truck is a
904 trans
318 TBI engine

other things sitting round,
a scrap ramcharger bodie with good axles
and 500 bucks to dump into this project

so if you were to build a high performance 4WD truck with this what woudl you do?