There are only two Fortune 500 companies headquartered in the nation's capital. One publishes The Washington Post. The other didn't exist five years ago.

This is a story about the swift, invisible rise of Steven and Mitchell Rales, two very young, very rich, very private brothers who are into plastics, tire changers, engine retarders, hand tools, industrial power chucks -- and debt and hostile takeovers.

You probably haven't heard of them. They seem to prefer it that way.

Described as shrewd, aggressive, tough, and bound closely by their family, the Rales brothers are virtually unknown in Washington, the city where they live and work. Neither has yet turned 40 years old, but each has amassed a personal fortune worth tens of millions of dollars, at least on paper. Together, from their Danaher Corp. headquarters a stone's throw from the Potomac River in Georgetown, they oversee a sprawling conglomerate built on borrowed money and nurtured by a keen eye for mismanaged, unglamorous industrial companies.

Among other things, this is a tale about money that doesn't talk. Neither of the Rales brothers would be interviewed for this story. Nor do they promote their accomplishments on Wall Street -- only a handful of stock analysts there track Danaher's progress, even though it had $617 million in revenue last year, along with rising profits, and is traded on the New York Stock Exchange.

According to Wall Street professionals who work with the Rales brothers and executives at their subsidiary companies, one reason the brothers shy from publicity is that they have been stung by past criticism. Forbes magazine, after persuading the brothers in 1985 to pose for photographs, dubbed them "raiders in short pants" and blasted them for using risky debt and real estate tax credits to mount hostile corporate takeovers.

Other critics, mainly those on the losing end of takeover fights, have accused the Rales brothers of everything from bad manners to bad faith in contract negotiations.

But as the Raleses' industrial empire has grown -- they now have operations in Europe and South America -- they also have found devoted followers, including executives at companies they have taken over.

"Both Mitch and Steve have just an uncanny ability to see value in situations, and contrary to what many people think, they usually pay a very fair price for what they buy," said John Doak, a vice president at Easco Hand Tools Inc., a Baltimore-based firm acquired in a Rales-led 1985 hostile takeover. "They're not geniuses. They're just extremely good businessmen who pay attention to the fundamentals of business."

The brothers supervise their far-flung subsidiaries with a very lean headquarters staff (less than a dozen employees, including secretaries) on Water Street, near the Key Bridge. Admirers of the pair say their ability to turn around troubled manufacturing companies beset by foreign competition provides a model of how the United States can reduce its burgeoning trade deficit through smart, aggressive entrepreneurship.

"The Raleses are in the forefront of getting this trade situation turned around in a constructive, not a defensive way," Doak said. "The more we pay attention to what they're doing, rather than to what the government is doing, the better off we'll be."

What the Raleses have been doing since 1979, when they struck out on their own from their father's Washington real estate firm, has been to look for companies to buy and operate -- sometimes in friendly deals, other times through hostile takeovers. (The Raleses formed their first investment partnership in 1979. Danaher -- named after a Montana river where the brothers had good fishing luck -- didn't come into being until 1983, when the Raleses bought and converted a Florida real estate investment company.)

Unlike some raiders, however -- including Washington's better-known Haft family -- the Raleses have not become preoccupied with threatened takeovers that yield stock trading profits but not control of the target company. So far, the Raleses have pursued their hostile offers to the end.

When the Rales brothers take control of a new firm, they try to reduce the company to its essentials by shedding headquarters staff, selling unprofitable subsidiaries and cutting costs and employment. In most of their acquisitions, the brothers have left management in place and provided powerful incentives, in the form of stock and bonuses, to achieve improved performance.

Lacking direct experience in manufacturing and industry, the Rales brothers have nonetheless reaped huge profits by identifying obscure industrial companies languishing because of poor management. Danaher's subsidiaries are a litany of pedestrian enterprises: a wheel balance manufacturer, a mobile tool distributor, a maker of air-conditioning components, and even "the dominant producer of engine retarders for heavy diesel trucks," as the Danaher annual report proudly describes its Jake Brake unit.

Critics of the brothers' methods worry about the enormous load of debt that has accumulated on Danaher's books. The company had long-term debt of almost $395 million at the end of 1987, down substantially from the year before but still a large amount compared to Danaher's $655.3 million in assets.

Moreover, much of Danaher's debt consists of risky, so-called junk bonds that carry high rates of interest. Wall Street skeptics say that Danaher could have trouble meeting its obligations if the economy hits a downturn. Others on Wall Street, however, say they believe that Danaher will move aggressively this year to reduce its debt to a more manageable level.

Details about the Rales brothers' plans aren't known, mainly because the brothers won't talk about them publicly. Nor is much known about where the brothers came from or how they mapped Danaher's growth.

Elder brother Steven Rales, 37, Danaher's chairman and chief executive, is described as the company's chief strategist and Wall Street deal maker. Mitchell, 31, Danaher's president, is said to spend most of his time supervising subsidiary manufacturing operations.

Business associates say the brothers are intensely devoted to their families and fiercely proud of their father, a real estate investor. At least one other Rales brother is said to play a role in Danaher's operations.

Wall Street associates, asked to describe the brothers' business style, often compare them to hard-bargaining real estate salesmen inclined to haggle over price and insistent that every detail of a transaction be set down in writing. Yet most of those interviewed said the brothers are fair as well as tough.

Wall Street associates, many of whom declined to be identified by name for fear of offending the Raleses, say that what the brothers lack in experience in heavy industry and manufacturing they have made up for with financial acuity. Steven Rales, especially, is said to have an exceptional eye for dissecting balance sheets. And the Raleses identified opportunities in manufacturing well before the falling dollar made that sector widely attractive.

The brothers have worked closely with investment bankers at Drexel Burnham Lambert Inc. to raise junk bond financing for their deals. Danaher made a presentation at Drexel's most recent junk bond conference in Beverly Hills, Calif., and the brothers are said to be devoted admirers of Drexel's junk bond chief, Michael Milken, whom they regard as singularly responsible for their rapid growth.

In addition, 11 percent of Danaher is owned by a unit of Kellner DiLeo & Co., one of Wall Street's biggest independent arbitrage firms. George Kellner sits on Danaher's board, and is said to have played a major role in one of its biggest deals: the 1986 acquisition of Chicago Pneumatic Tool Co.

Perhaps the best illustration of the way the brothers operate, however, is a deal in which Danaher, the publicly traded vehicle for most of the Raleses' operations, was only peripherally involved: the 1985 acquisition and subsequent restructuring of Baltimore's Easco Corp. Admirers of the Raleses point to the deal as a crowning example of their ability to rescue troubled manufacturing companies. At the same time, critics see the takeover as a troubling illustration of the Rales' ruthless devotion to profit.

When the Raleses first expressed interest in the company early in 1985, Easco seemed to be yet another disheartening example of a once-proud American manufacturer humbled by imports and its own slow-moving management.

Though Easco's aluminum products division was healthy, the company was being dragged down by its foundering hand tools unit, which had managed to squander profitability despite an exclusive contract to make hand tools for Sears, Roebuck & Co.'s Craftsman line.

Through a private partnership, the Rales brothers first approached Easco's management in January 1985 with a friendly merger offer.

But management, led by Maryland Republican party chairman Richard Sullivan, rebuffed them. The Raleses then proceeded with a hostile tender offer, and by June had won a majority stake. Sullivan sued the brothers for failing to honor a so-called "golden parachute" severance contract. Sullivan, now a Baltimore attorney, declined to comment on the takeover.

Immediately after gaining control, according to Easco executives, the brothers wanted to sell off the hand tools unit in order to focus their efforts on the company's healthier aluminum division.

The hand tools unit's management, however, in the wake of a shakeup that preceded the Rales' involvement with Easco, was just beginning to stage an impressive turnaround: The same month the brothers acquired control, the business posted its first profit in several years.

Easco's Doak recalls that at a key board meeting six months after the takeover, Steven Rales told the hand tool maker's executives: "If you guys can continue what you've done, we'd have rocks in our heads to sell this thing."

In fact, instead of selling the unit, the brothers decided to buy it. Forming a partnership with existing management, in August 1986 they launched a leveraged buyout of the hand tools operation at $17.50 per share, using money borrowed against the division's assets to complete the deal.

Critics viewed the price as unfairly low, but Easco managers defend it by saying it was higher than any offer obtained by the Raleses when they earlier attempted to sell the division.

In retrospect, at least, the buyout was a tremendous investment. Encouraged by the Rales brothers to accelerate their turnaround, Easco executives slashed their headquarters staff, cut employment, sped up manufacturing innovations, renegotiated supplier contracts and shored up relations with Sears.

The company's headquarters building, with one entire floor dedicated to the chairman's office, was sold. Executives stopped flying first class and traded in their luxury cars for less flashy models.

When they became owners, the hand tool unit's managers approached nearly every facet of their business in a different way.

"After a while, you start saying, 'Yes, I would like to go first class, it's more comfortable, but when the difference of flying to Germany is $2,200 of my own money, is it worth it? Do we all need private secretaries?' The answer was no," Doak said.

By May 1987, only nine months after going private in the buyout, Easco Hand Tools Inc. made a new public stock offering, raising about $50 million and leaving more than half the shares in the hands of management and the Rales brothers.

But the hand tool unit's struggle to revitalize itself in the face of increasing competition from Asian competitors has had costs for people at the company who don't own stock.

Employment has been slashed from a peak of about 3,100 to a present level of 2,300. More cuts are planned.

Moreover, manufacturing has been shifted away from a union plant in Springfield, Mass., to union-free facilities in the South.

Workers in Springfield have suffered through a succession of strikes and layoffs.

"The morale in the plant is pretty terrible," said Raymond DeGray, a former union leader who was fired for participating in a wildcat strike. "It's a pretty sad situation.... The people in there feel it's just about over" after decades of employment in the plant.

The Springfield workers' dilemma probably reflects wider problems of American industrial competitiveness more than any programs undertaken by the Raleses, however.

Devoted to streamlining their operations, the brothers nonetheless let their on-line management make nearly all the important day-to-day decisions.

Easco executives say the brothers rarely call more than once a week and sometimes are out of touch for as long as a month.

One officer at another subsidiary company compared the Raleses to cost-conscious phantoms hovering over the firm's operations -- which, given the profits they have made and the low profile they prefer to keep, is probably an image the Rales brothers wouldn't mind at all.