Young men wearing colorful leather jackets and gold rings the size of brass knuckles strutted through the crowd that hung out in the neighborhood called Bushwick on a sunny Saturday afternoon. They shouted out the street names of the drugs they sold.

"I've got D.O.A. - D.O.A., here," said one heroin peddler.

"Main Event, Main Event, Main Event," chimed in a competitor.

Their eyes brightened momentarily as a stranger in jeans and a sweater approached - until they realized he was drumming up business for his own underground activity.

"Have you heard about needle exchange?" asked Steve Schiff as he approached several men leaning against a post. "It's an AIDS prevention thing."

"I don't shoot up, I sniff," said one man as he quickly retreated.

Another wrinkled his brow. "What are you, a cop?" he asked.

Schiff is actually a member of the AIDS prevention organization Act Up. His group is trying to curb the transmission of AIDS among drug users who share needles. The group gives out clean syringes and bleach kits to disinfect old needles. No questions asked.

For two years, Act Up has been passing out syringes and bleach kits in several New York City neighborhoods in defiance of a state law that prohibits possession of a syringe without a prescription.

This month, Act Up members will begin this strategy of confronting the law head-on in Philadelphia.

Judges have exonerated needle exchangers in New York, Boston, Jersey City and California, saying the threat the activists were trying to prevent outweighed the harm they caused by violating the law.

And politicians, health officers and police in several of the 11 states where possession of unprescribed syringes is illegal have been persuaded to relax their laws - or at least to look the other way.

Recently, Mayor David N. Dinkins joined the converts when he reversed his long-standing opposition to needle swaps. Dinkins acted on the recommendation of his top health advisers, who studied a needle exchange program in New Haven, Conn. A Yale University report stated that the program in New Haven cut the rate of HIV infection by one-third.

"Different rules apply when the alternative is a greater number of deaths," said Manhattan Borough President Ruth Messinger, another public official who dropped her opposition to needle exchanges and has become a vocal supporter.

UNCONVINCED

But some public officials remain unconvinced.

Louis W. Sullivan, secretary of the Department of Health and Human Services, and Bush administration drug czar Bob Martinez have cast doubt on the studies showing that needle exchanges inhibit the spread of AIDS.

Schiff asked an older man hanging out on Knickerbocker Avenue if he needed any clean needles.

"I don't do that stuff," the man said.

"Maybe you know somebody who does," said Schiff, a public school art teacher, as he handed him a card describing the needle exchange. "We're here every week."

Sure enough, word passed swiftly through the neighborhood where drug use is so flagrant that the darkened windows on one car were decorated with a painting of a scale overflowing with white powder and the words, "It's My World."

A small line gathered where the anti-AIDS activists set up the needle exchange on a sidewalk beside a park. Most of the clients were lucid, but some were confused. One man said he felt cold. He was sweating profusely.

"Did you bring me anything - any used works?" Steve Barker, the leader of the crew, asked a man, whose skin and garments had the soiled sheen of somebody who no longer bothers to change clothes.

The man had no syringes - he said he left them at home.

ONLY TWO

Barker reached into a plastic shopping bag at his feet and took out two syringes - "works" or "sets" in the parlance of the street. In a soft voice, he explained that he could give the man only two syringes. But if the man brought those back the following week - the needles were marked with paint to identify them - he could get four new needles. Act Up volunteers will exchange up to 20 needles per person a week.

Other volunteers handed the drug user a plastic bag that contained a small bottle of bleach solution, a bottle of clean water to use for mixing drugs, a clean bottle cap to heat the drugs, a cotton ball, an alcohol pad for cleaning the injection site and instructions - everything an addict needed to make a sterile injection, except for the narcotic itself.

"Don't share, OK?" a volunteer said to the man.

New York City has 200,000 intravenous drug addicts, and health officials say that half of them already have contracted the AIDS virus. More than other high-risk AIDS groups, the drug users are in great danger of passing the infection on to their sexual partners and their children.

REPEAT CUSTOMERS

The repeat customers know the routine well. Some exchanged pleasantries with the volunteers as they pulled out bundles of needles from crumpled paper bags and counted them into a plastic jug - the volunteers never touch the needles themselves.

Others were sullen and businesslike. "I know, I know - don't share," said a man who waved off the offers for bleach kits and condoms, and hurried away with his handful of syringes.

Each week, the Act Up program distributes up to 3,000 clean needles throughout New York - the program buys them in bulk in other states for about 10 cents each.

On the street, syringes sell for $2 each, whether they're sterile or dirty - there's no guarantee.

Act Up volunteers say the addicts return about two-thirds of the needles. But nobody was keeping a close count during a recent day on the fringes of civilization in Manhattan's Lower East Side and in Brooklyn.

Some opportunists were blunt about what they intended to do with the giveaway needles.

"Thanks, man," one man in Bushwick told Barker. "You just gave me $4."

Barker, a free-lance photographer who has volunteered in the needle exchange for seven months, was miffed at the man and told him so. But later Barker said that he was unconcerned that some of the needles were being resold. Even the scam artists, he said, were spreading the word about the need to practice safe sex and not to share needles.

"I'm happy to just get the word out there," he said. "It's getting passed around."

In another part of Bushwick, Barker's crew set up shop on a block occupied by an idle knitting mill and a closed tortellini factory. The street was empty except for an abandoned car, a cardboard shack and a man squatting among the debris, absently poking a syringe into his forearm.

Addicts emerged from the alleys within minutes after the needle exchangers arrived. The heroin addicts, frequently older, moved sluggishly. The cocaine addicts, mostly younger, were percolators of excess energy. They talked nonstop, like three-card monte players entertaining an audience of tourists.

Some of the addicts felt obliged to prove that they actually used drugs and were not just trying to get free needles. Some extended their scabby arms. One cocaine user rolled up his pant leg, exposing a purple sierra of welts and needle scars.

"You don't have to do that," said Barker, handing him several syringes.

An emaciated, hollow-cheeked woman with pronounced veins in her neck - another nonstop chatterer - complained that she and her husband were unable to find a treatment program that would accept them together.

"It's so freaking frustrating," she said, adding that the state government had seized her children recently and put them in a foster home. "None of the hospitals will take us."

At each location, several addicts pleaded with the volunteers for help in getting into a treatment program. All that the needle-exchangers could do was to give them a list of treatment facilities.

Some public officials, in announcing their support for needle exchanges, express the hope that the exchanges can serve as a "bridge" for drug addicts to seek treatment - rather than a way for them to sustain their habits.

But it's a bridge that leads nowhere. There are a total of 600,000 addicts in New York City. And there are only 50,000 treatment slots available in the entire state. They're always full.

"We don't have any goddamned treatment," said Rep. Charles B. Rangel (D., N.Y.), chairman of the House Select Committee on Narcotics Abuse and Control, whose Harlem district is home to one of Act Up's exchanges, Rangel. "So it's hypocritical for anyone to say needle exchanges could be a bridge."

Act Up members say police harass them in Manhattan's Lower East Side, but generally ignore the needle exchanges in the neglected neighborhoods of Brooklyn.

"We've been hassled nonstop," said Gay Wachman, a British native and Act Up crew leader. "Two weeks ago, the police confiscated 600 works."

On a recent Saturday, in a littered vacant lot on the Lower East Side, Wachman and the other volunteers set out plastic buckets filled with bleach bottles, alcohol pads, condoms and other items - a "salad bar" from which the addicts can choose the things they need. The volunteers handed the needles out separately.

Act Up members said the police stopped arresting volunteers after a Manhattan Criminal Court judge acquitted eight needle exchangers in June.

While the volunteers talked, a blue police cruiser pulled up at the curb. The addicts scattered. The Act Up volunteers continued talking nervously, ignoring the officers' stares. After a minute, the police left.

The police are not the only ones with hostile glares. A mother with children in tow walked by the volunteers, picking up her pace after she realized what they were doing. She scowled.

One older woman walked up and stared at the syringes. Wachman gave her a pamphlet explaining the needle exchange. The woman read a few lines and thrust it back at Wachman before she stormed off.

A man who called himself Gypsy, who wore a single earring and a red bandana on his head and clutched a bottle of beer, collected his clean needles and said, in regretful tones, that he had recently relapsed into his old habit of injecting cocaine. The drug is so powerful, he said, that it overwhelms all other urges.

"A couple of weeks ago, I was really fiending out," he said. "I was with a guy who is HIV positive. I still used his set, because it was the only one we had. I washed it out with water. You see, when you need the coke you'll do anything.

"Having an abundance of clean works around like this would sure help," he said.

But lapses occur frequently, and Gypsy is walking testimony to the limits of what a needle exchange can achieve.

Three times Gypsy has been tested for AIDS. The first two tests found no HIV infection. But Gypsy hasn't bothered to check the results of the last test.