But, being a boy, I wanted it to work better. So I replaced the battery with a lamp cord and plugged it in. It promptly burst into flames. Awesome!
But instead the car got REALLY, REALLY, REALLY fast, shoot out of the track and smashed into the wall.
Of course, I happily put a second car on it, and changed the track so that the car does not end smashed, and indeed, I could launch cars all over the place. Also as the car raced, sparks came out of the contacts with the track.
Now that I am older and know even more physics, I have no fucking idea on how I made a DC motor work only forward with a AC current.
The sparks would come from feeding way too much voltage in, enough to jump the gaps caused by momentary losses of contact between the track and a fast-moving car.
Another possibility is that the motors in the slot cars had electromagnets for the stationary field instead of permanent magnets. That's what an ordinary power drill, especially one without electronic speed control, has. Such a motor will run pretty much the same on AC or DC. When running on AC, the rotor and stator both change their magnetic fields in perfect sync so the net effect is substantially the same as running to same motor on DC.
Wikipedia has an article on "Brushed DC electric motor" with a section on "wound stator". It doesn't specifically mention running the motor on AC, but there's enough there to show you what's going on.