The alarm went off at 3:20 a.m. the Sunday before Christmas at 1800 Massachusetts Ave., bringing a team of firefighters who found flames licking upwards from the office building's third floor.

As the firefighters battled the two-alarm blaze, officials of the building's owner and main tenant, the National Rural Electric Cooperative Association, summoned by the building manager, began arriving at the building just off Dupont Circle. A small group of association employes huddled outside until the fire department let them go in at 9 a.m.

Once inside, they found a scene out of every business's worst nightmares: a mostly gutted third floor; water, smoke and soot damage to the second and fourth floors; piles of key documents and papers burned black and drenched with water; and the most important tools the association has -- computers, printing and other office equipment -- in various stages of meltdown.

Estimated damage: at least $3 million -- plus another $1 million in smoke and water damage to 600 Persian rugs stored in Pasargad Carpets Inc., a store that backs up against the NRECA building.

During the conflagration, temperatures on the third floor of the eight-story association headquarters reached 2,000 degrees. A Xerox machine was melted into "a blob," according to Bob Nelson, NRECA's director of public and association affairs.

Fortunately, no one was in thebuilding at the time of the fire. The only injury caused by the blaze was to a D.C. firefighter, who was treated at a nearby hospital for a leg injury.

But the fire created major problems for the association, from retrieving damaged computer data to finding new office space to continuing with the NRECA's business of fighting legislative battles on Capitol Hill on behalf of its members, who run consumer-owned rural electric companies.

The nine-year-old building had no sprinkler system -- none was required when the structure was built. But the NRECA did have a comprehensive disaster-preparedness plan that was triggered when officials of the association realized how serious the damage from the fire was. Experts say such plans are vital to get a business up and running as quickly as possible in the wake of a disaster.

Within hours of the fire, Patrick Gioffre, head of finance administration at the NRECA, had already begun arrangements to get the building's electricity back on, had hired contractors to assess structural damage (beams were exposed and twisted out of shape on the third floor) and had called computer technicians and vendors to salvage and clean personal computers and mainframes. A contract was signed with a professional office clean-up firm found in the Yellow Pages. Some 30 key employes were told to report to work on Monday, and the rest were placed on administrative leave with full pay.

In the days following the fire, NRECA executives and employes began rebuilding -- supervising clean-up crews, salvaging what they could from damaged papers and computer disks and tapes, arranging for insurance, looking for new office space, telephoning members -- and giving thanks that the association's nerve center, a fourth-floor bank of computers that handles the bulk of the NRECA's record-keeping, had not been more heavily damaged.

"The electronic devices, the computers and the telephones are the heart of the association," said Robert Bergland, the association's executive vice president and general manager, who estimated that one-third of the personal computers and word-processing terminals in the building were destroyed by fire or damaged by smoke and water.

"The key here is our mainframe computers," said Roy Palk, executive director of operations at the association. "If we've lost them, we're in huge trouble. ... Nothing else is going to work until we get that working." The mainframe computers handle health insurance claims, pension benefits, premium bills, membership dues, accounting records, newsletter mailing lists, and attendance records for association-run classes on behalf of 60,000 employes at 1,000 rural cooperatives in 46 states.

By Monday, employes at the association were able to look at the disaster philosophically and even with some wry humor. "This says something for not storing {papers} on the floor," said Patrick Dahl, a writer for the association, pointing at stacks of blackened and soaking paper outside what was once his office on the soot-covered second floor. "I operate out of this wallet," he said, opening up a thin one. "It's got office numbers. ... The cleanup is three years overdue, anyway."

"Welcome to the cave," said Jack Wood, NRECA's manager of conferences. He pointed to a smoke-smeared and sopping two-foot stack of papers on the desk behind him. "That's the history of the national rural telecommunications cooperative," a fledgling spinoff of the NRECA, he said, smiling.

"We'll re-Xerox some stuff," he said. "I keep saying what if it really was burned, would I really have missed it?"

Wood and the rest of the association's staff have a tall order before them: The association's annual meeting, with 12,000 attendees, is scheduled for the first week in February, and several smaller conferences are to be held between now and then. "We'll make them all," Wood said. "We'll just go back to ground zero and set up a checklist."

As the cleanup began in earnest last Monday, the association began looking for temporary office space to put 130 to 150 members of its 300-person staff. A makeshift office had been set up in the first-floor boardroom, where long tables, phones, easy chairs and piles of blank legal pads were provided to a group of employes. That day, a local hotel surprised the association by delivering 50 free lunches; several other organizations called to offer help.

On the second floor, where Dahl and Wood had worked, employes wore rubber boots and tried to salvage whatever they could. Personal photographs, artwork, mugs, a postcard of Abraham Lincoln, a white teddy bear with a red bow, a bedraggled miniature Christmas tree with ornaments -- everything was covered with a gray film of soot.

Elsewhere in the building, employes of Servpro, a cleaning company, used special vacuum cleaners to get water -- several inches deep in some places -- up from the drenched carpets, and tried to remove soot from desks.

Nelson, his rubber-booted feet up on a desk covered with slimy soot, worried about replacing 6,000 ruined signs that had been printed for the annual meeting and how to confirm reservations at thousands of New Orleans hotel rooms. "The biggest problem is the fact that we have a newsletter that is supposed to go out, and we can't get the mailing list" on the s damaged computer system, he said.

On the third floor, where the fire started, a dank wind blew through missing walls. Soot covered everything and mixed with water on the floor, turning the carpet into what looked like a drenched and blackened post-nuclear golf course. Bare bulbs lit a seared group of sofas and chairs in what was once a lobby.

On the fourth floor, windows that firefighters had broken to rid the building of smoke were boarded up, and glass was strewn on the floor. A sign over a white and orange kitchen station made ghastly gray by soot read, "Do not leave dirty cups or dishes in this sink! Yourtotal cooperation will be appreciated!" A coffee machine, an empty metal napkin dispenser, a ladle and packets of Sweet'N Low cluttered the grimy counter.

Normally, the mainframes communicate in at least five computer languages; "right now, they are not speaking anything," said Stan Adams, project manager for I/O Magnetics Inc., a Columbia computer maintenance firm hired to clean the computer systems. "They are shut down and in limbo."

Adams and a team of workers were cleaning 4,000 reels of magnetic data-storage tape, the computer disk packs mounted inside the mainframe computers, wiring under the floor, and the computer room's floors, walls and ceiling. The tapes were run through a machine with a blade that knocks off soot without touching the tape. If every molecule of dust wasn't removed from the disk packs, "you're going to have a head crash and we are liable to lose all the information," Adams said.

Still, the association was "extremely lucky" the fire did not destroy the computer room or an adjacent room that holds backup computer data, Adams said. The prognosis for repair of the computer system, he added, was good.

Even if fire had destroyed the computer system, Gioffre and a team of computer experts at the association would have been prepared. "We had an official disaster recovery plan set up," Gioffre said. "Part of it is, 'What if we lost everything? Can we recover?' Yes."

NRECA protected itself by copying computer records daily onto magnetic tapes in two sets of duplicates. Each day, one of the duplicates went into the magnetic tape room next door to the main computer room; at the end of each week a complete weekly set went to a fire- and bombproof vault in Georgetown operated by File Away Storage Inc. Key documents also were stored at File Away, one of several local firms that handle such storage tasks.

By last Wednesday, the main computer room was virtually spotless; plans were being made to turn the computers on later this week. And NRECA had rented office space at 500 North Capitol St. and plans to begin moving files and some operations there today.

Even as it attempted to recover from the fire, the association dealt with ongoing business, winning a battle on Capitol Hill to allow its members to refinance $2 billion worth of high-interest government loans at lower interest.

As the week wore on, NRECA officials pondered how innocently their disaster had begun. Fire department officials said they believed faulty wiring caused the fire, but association executives believe it was started by a malfunction in a $75 calculator.

"It was a patch of ash; it looked like rubber that had burned down," Nelson said. "You never think that it's going to happen. Who would have thought that a little desktop calculator -- and a brand new one at that -- could cause this?"