CanaryMod is a server mod for the Minecraft server software that uses the code from hMod. This is only the source code, if you don't know how to use this you won't find it useful.
Add a new project from existing sources in whatever IDE you use. Add minecraft_servero.jar as a library, and mysql-connector-java-bin.jar if need be. Your IDE should compile .class files that you can copy over into a clean minecraft_server.jar, then you can test your changes.
You can get this file by running jarjar.bat in the jarjar folder and it will automaticly make minecraft_servero.jar