So it is time to buy an engine. It will be installed on a Capricorn C01.
I would rather go with Novarossi but there is one thing that confuses me.
I am looking at the flash .21 3 tuned and the 5 tuned. What is the difference between 3 port and 5 port and why should I go for 5 port? Their power output seems the same.

Will I need a fuel filter? What about exhausts? And finally, what air filter should i get? Do i need the ones with the silencer box?

Thanks

Hahaha, Im sure some people are going to (Sigh) over this!
OK. For legal racing, go the 3 port - that is the maximum allowed in racing. 5 port motors have more power up top than those with 3, but also use up more fuel on the downside.
As for a fuel filter, it's better to be safe than sorry!
Exhaust: The 2660 is an excellent - and the most powerful (I believe) - pipe to run it with, combined with a short conical header and also the most fuel hungry. Not entirely sure on other pipes, but surely the 2630 pipe would be compatible as well as a variety of others, but the 2660 is what basically 9/10 of people run here anyway (plus it sounds awesome too )
With the airfilter and the INS box, I would use the INS box. It doesn't really do much to performance, and it also keep the outside of the filter cleaner between runs compared to running without one.
There are a few people that make them - RB, Novarossi, Xceed, Mugen and a few others. Xceed is the lightest from what Ive heard, but you want a good quality filter.

On a side-note, why don't you wait for the new Novarossi Line-up for the next season and see if they have something better than the current Flash .12? I remember seeing somebody saying a new Flash .12 will be more powerful and more fuel efficient (or maybe a Flash .21 Special)

Do not get focused on "tuned" or "modded" if you do not have a maximum driving experience. When you are a starter it is wise to start with something more simpler like the N12T1

+1 on that.
You definitely want to have a "learner" engine if you haven't raced before.
Once you get the ropes of it, and the engine leaves you wanting more, then go for the big guns!

i am thinking i might as well spend the cash for a good engine and then run it a little bit rich and/or adjust my remote to only 50% gas. That should keep me safe, right?

No, I would not advise that. Just learn wit a cheap motor and when you are more experienced you already have driven the motor to the end of life. For sure when it is your 1st nitro experience you will have tuning difficulties what does give a shorter life of your engine. Believe me, the N12T1 is still a fast engine.

gottcha
i will do as you advice if i can find this motor.
what other motor sizes can i fit on the C01? Can i got bigger or smaller from .21?

You can only fit small block engines, and a .12 size is more than enough power for such a lightweight car.