Making My Own Compost in a Bucket?

I really should have asked the question before now, but this is the question or problem. I started to make compost for my organic garden, I used carrot shavings, potato peels, apple cores, banana peels, and whatever veggie scraps I had at the time. I threw in some dirt and a little water and made sure I stirred it up.

Now here is the problem, its been raining and more water got inside the little bucket of compost. The mixture has turned into mud and with the extra water it smells bad almost like someone took a dunk in it, but I thinks its the potato peels that stink. I still see part of the apple core, it's black.

My question is: Can I still use the bucket of mud as compost. Should I drain the water out of it. Or should I put more dirt in it, or just dump it in the garden. What should I do?

By Angie