That's the spring-return pre-heater position I told you about. On a diesel, you first turn to key to #4 while the glow plugs or manifold heaters warm up. Then you turn to #5 to engage the starter solenoid. Releasing the key from either position automatically returns the key to position #3.
But something sounds wrong with your terminal connections. Yours might be numbered differentely, or simply a bad switch. Because terminal 1 (battery) should be connected to terminal 3 (pre-heater) and terminal 5 (starter) when the key is in position 5.
Take a look at this document, see if it helps. Again, it's for a diesel. But it should reinforce what I mentioned earlier about not all of these Ford switches having the same terminal pattern.
//greg//