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I know that but thats not the problem if it was only using as much as it needed then I wouldn't be getting lag. But anyway I sorta solved the problem because I switched from using the vanilla-ish server to MCPC+ and that seemed to solve my problem.
Im using mac OS X Mountain Lion
its my desktop computer but I have run a private server on it before perfectly
Im using Direwolf20 1.5
I didn't add any extra mods to my server
I run it with java -Xms512M -Xmx2G -XX:permSize=128m -jar ftbserver.jar
So its kinda a weird problem even though I run...