Ignoramus25888 writes:

I bought a used compressed air dryer for $10 last weekend. Tried it
and found that it was working, since the outgoing air was cold and the
release valve was functioning. My question is about capacity. This
dryer uses about 264 watts of power, according to my wattmeter
(kill-a-watt). Is that enough for a 3 honest HP compressor.

Could be. The smallest sizes are designed for 6 or 10 cfm, and 3 HP
would be about 10 or 12 cfm. My little Hankison unit runs at about 200
watts and is rated for 10 cfm. I've measured the relative humidity of
the output air at 10 percent, with hot 100 percent moist air input.

Cold outgoing air is not a good performance indicator. Many designs
efficiently reheat the air with the hot side of the heat pump.

To properly test performance, you must measure the relative humidity of
the output air. Get a wet-bulb/dry-bulb psychrometer and measure the
relative humidity of the output air by directing a stream of exhausted
compressed air over the bulbs of the thermometers. Or improvise your
own wet-bulb and dry-bulb thermometers and use my psychrometric chart:

http://www.truetex.com/psychrometric_chart.htm