I just noticed when I run a engine over and area a bit fast a can see small blue sparks by the wheels, i think they might be small dead spots, is this normal and can it be fixed?

I believe what is happening is that when you exceed 88 scale miles per hour the DCC flux capacitor is engaging.

Right now I would say the track has to be cleaned.

Rich

Is it an Athearn engine?

That's funny Paul 

Anytime the wheels lift from the track slightly you might see a small spark, it's an arc of current across the gap. Run your finger over the track where you are getting the spark, could be a misaligned joint. Also clean the track as mentioned, the wheels could be "breaking and making" electrical contact as they pass over a dirty section.

Bob

guilford, it is a atheran engine a CN gp-35.
yampa, any suggestion for cleaning track, i dont think i do it right, i just use these scrub pads (the ones for dishes)

Go to Staples and buy some pink erasers. Use them to clean the rails. The older grey ink erasers were better but I've yet to see them on sale anywhere.

As for the engine, older Athearn had those sintered iron wheels which accumulated a lot of dirt.

You need to run the wheels while the engine is upside down. A wire wheel in a dremel works best but you could use an emory board and get good results. Just run the motor and touch the emory board to the wheels. You'll eventually get a nice clean wheel.

You could replace the wheelsets with new athearn wheelsets, follow Woody's method of cleaning, or if your a serious serious modeler, replace the wheelsets with NWSL Proto:87 wheelsets...

I think the dish scrub pad is probably just one step up from steel wool in something not to use to clean rails.   If you have a small layout, lintless cloth and rubbing alcohol works fine.  An artists eraser or Brite Boy is also good.  It's a good idea to rub the rails down with a clean cloth after cleaning. 
Gene

Go to an electrical supply house and purchase a commutator eraser. It will look like a pinkeraser impregnated with an abrasive . Also what is very effective is point or electrical contact cleaner on a non fraying rag. Almost the same is Brake cleaner . Follow  instructions on can - some of these can be quite volatile.
Don

ao its a new engine not an old 1

Does the box have a clear plastic window on the front?

the box does have a clear plastic window...

Does a basic white eraser work as good for cleaning the track (All i have atm)

also only the athearne cn gp- 35 seems to have the problems with the track

I also have "new" Athearn locomotives that have the sparking problem.... my other locomotives work fine.