Can somebody tell me why I'm getting this error code "P0735", is my transmission control module starting to go bad? Can someone point me in the right direction on diagnosing this problem. Thanks

Probably has something to do with the 5th gear's hydraulic clutch circuit, just a wild guess. Check if you've lost fluid, or if you have a leak somewhere. Search the web for OBD II fault codes, they're pretty standard across the different car manufacturers, you may get more specific details. Best bet is to take it in to a BMW stealership and let them have a look.