Not so long ago the best bargain you could find in Washington drug stores was the local drug chains' own stock.

You could pick up Peoples Drug Stores for $11 to $12 a share and buy shares of Dart Drug for a little over $7 apiece.

But the two drug chains are no longer bargain basement retail stocks, thanks to the peppy stock market and the past and potential successes of Dart and Peoples.

Peoples' stock has soared as high as $27 recently, producing multimillion dollar paper profits for Chairman A. C. Israel, who is sitting comfortably on 1.3 million shares.

Dart hit $24 a share last week, up about $1 a week for the last two months. Back on Oct. 1, when Dart shares were selling for $16, the company announced plans to buy back 300,000 shares -- 20 percent of the stock in public hands. The jump in the stock price has kept Dart from acquiring any of the shares it hoped to retire.

Dart and Peoples appear to have significantly improved their position in the Washington market at the expense of Drug Fair since founder Milton Elsberg sold that chain. Elsberg arranged a merger with Gray Drug stores of Cleveland only to see Gray taken over by the Sherwin Williams paint company.

Since Doc Elsberg retired, Drug Fair hasn't been the same. Gone not only is the Elsberg entrepreneural spirit, but also the local management that enabled the chain to hold its own in one of the most competitive drug-store markets. While Peoples and Dart are in the pink, Drug Fair has become another swatch in the Sherwin Williams color card.

Nothing that has happened in the stores can explain all the runup in Dart and Peoples stock. Consumer spending is still soft, but Wall Street is bidding up the price of retail stocks in anticipation that sales and profits will improve quickly as the recession ends.

In addition, investors are speculating on the future plans of the two drug chains. As always, Chairman Herbert Haft is holding his Dart cards close to the vest, but Peoples' President Sheldon W. Fantle showed part of his hand last week in an interview with Dow Jones.

Most intriguing is Fantle's hint that Peoples wants to get into the mail-order vitamin business, possibly by acquiring another company. The high price of Peoples stock makes this an opportune time to buy a new business and pay for it with stock.

Vitamin and nutrition departments are going into Peoples stores as the latest move by Fantle to position his stores as all-purpose health centers. The same strategy lead Peoples to stock some stores with home-health-care products -- like bedpans and crutches -- and to put optical departments in 45 of its 558 stores. Five more eyeglass centers will open next year.

The emphasis on health care not only boosts sales of more profitable product lines, but also differentiates Peoples from the run-of-the-mill super drug store that sells everything from horehound cough drops to hardware.

Dart Drug remains at the other end of the diversification scale, operating 20th century general stores plus its very successful spin-offs, Crown Books and Trak Auto.

Already the country's biggest discount book chain, Crown is on its way to becoming the first nationwide book discounter, under the direction of Robert Haft, who recently took over from his father as president.

Robert Haft's success with Crown, his ascension to the presidency and the decision to buy back one-fifth of Dart's publicly owned shares are fueling speculation about what's ahead for Dart: Does Herb Haft plan to retire soon? Is the stock repurchase a prelude to taking the company private by buying up the rest of the relatively few shares in the hands of outsiders? Will Crown--now a joint venture with Thrifty Drugs of California -- be spun off into a separate public company?

There are no immediate answers, but intriguing questions alone can spur the price of a stock like Dart Drug that has a small "float." The size of the float -- or number of shares available for trading -- has been an important factor in recent increases in the price of many local stocks.

A week ago in Washington Business, we reported the dramatic gains in shares of many Washington-based companies, concentrating on the bigger firms that make up the Top 100 Washington businesses.

Several of the smaller firms have also watched their stock soar thanks to a small float that has the same effect as a booster rocket. When there is only a small pool of stock to trade, it doesn't take many "buy" orders to jack up the price.

Nowhere has the small-float, big-splash phenomena been more apparent than at Cerberonics, the Bailey's Crossroads professional services firm. Early in 1981 Cerberonics was quoted at 1 3/4 bid, 2 3/4 asked in over-the-counter trading. As of Friday, when Cerberonics held its annual meeting, the shares were up to $39 bid, $41 asked -- or roughly 25 times 1982 earnings of $1.57 a share.

This year's profits were more than double 1981's and revenues jumped 47 percent to $14.5 million for the firm, which provides engineering and technical services to the Pentagon. Cerberonics, incidently, is named for Cerberus, the three-headed, dragon-tailed dog that guarded the gates of hell in Greek mythology.

A mere 472,000 shares of Cerberonics are outstanding at present, but the float should increase significantly in the next few weeks. A public offering of additional shares could be made as early as next month and a stock split -- probably two-for-one -- is also expected.

Additional shares also are forthcoming from CACI, the Arlington computer company whose name is pronounced "khaki" by investors. With slightly more than a million shares outstanding, CACI is now trading at $105 a share. Stockholders earlier this month voted to boost the number of authorized shares from 1.5 million to 10 million, enabling CACI to carry out its plan to declare a 200 percent stock dividend, which will bring the shares down to a more reasonable $35 price.

CACI stock has enjoyed a 175 percent rise since August, thanks to the small float, a 63 percent increase in revenues and a 46 percent jump in profits.

A similar 70 percent jump in third-quarter profits also contributed to the 80 percent surge in the stock of United Services Life Insurance Co. Often overlooked as simply another subsidiary of International Bank, United Services has handily outperformed its parent in recent weeks.

While International Bank's earnings have been hurt by several subsidiaries that are linked to the depressed automotive and manufacturing industries, United Services has profited from lower interest rates and increased institutional interest in life insurance companies. As a result, United Services stock that sold around $11 in August is now at $20.