You can upgrade weapons in Dead Space by finding an upgrade console and using nodes to unlock bonuses including increased damage, magazine capacity, and reload speed. Each weapon features three special abilities on its upgrade tree, but you can only gain access to these by finding or purchasing the corresponding weapon upgrades. These special abilities aren't the same as the weapon's alternate firing mode, but instead either strengthen them or add a further benefit.
For example, the Plasma Cutter's special abilities add a burning effect to its shots and give its melee attacks a chance to knock down Necromorphs. The Pulse Rifle's special abilities, on the other hand, buff its reload speed and the blast radius of its alternate fire proximity grenades. The best way to find nodes is in the little see-through wall boxes located around the ship or inside rooms locked by Security Clearance.