PEOPLE WHO DIP INTO Margaret Gibson's stunning collection of six short stories will soon find themselves surrounded by madness, murder and cigarette smoke. Surely few other stories are so bathed in halos of disintegration, termination and breathlessness.

Gibson, a resident of Toronto, writes a finely crafted story built on a good rhythm and cadence of words and scenes. She has a gift for the brilliant, if understated, creation of atmosphere. She does not use a lot of figurative language or metaphor. But there is one central one: that of the mentally ill person as butterfly. In the book's last story, "The Butterfly Ward," the female narrator compares mental patients to butterflies as she and other inmates are pinned on giant boards to undergo medical procedures. What she describes is not an actual procedure like a brain scan but is rather another manifestation of her mental illness.

The dust-jacket blurb claims that Gibson's literary foremothers are Sylvia Plath and Hannah Green. This seems doubtful. Although there is the requisite amount of Laingian and Szaszian thought rushing about, it is more likely that Gibson's actual ancestors are Anna Kavan and Celiene, with a splash of Genet thrown in for good measure.

Gibson has also been reading her Margaret Atwood, particularly Survival, Atwood's critical study of themes in Canadian literature, in which she classifies victims into categories. Most of the inhabitants of Gibson's nuthouses, isolated cabins, derelict farmhouses and "butterfly" wards fall into the category of victims who deny their victimhood because of outside forces. And here it is Madness. The 19th-century madwoman in the attic has moved right downstairs into the front parlor and the kitchen, where she smokes incessantly.

These six stories have four female and two male narrators. The first story, "Ada", which features a grisly murder, is told by Jenny, a 29-year-old woman who has been in the mental hospital for seven years. Jenny no longer thinks rationally all of the time because she has had electric shock treatment. This story, perhaps the least successful of these otherwise compelling tales, does have an excellent scene of group therapy where the patients and doctors try to manipulate each other. The reader is amused, chagrined and horrified, all at once.

Interestingly, two of the stories are told by men whose will to fatherhood is truly destructive. They are dangerous to themselves, probably to their children, and in "Considering Her Condition," certainly to the mother, who is seen as the ultimate womb. (Gibson treats womb envy -- pace Karen Horney -- in literary form with sensitivity and graphic vision.) This narrator, Stephen, is a screenplay writer whose head is filled with movie cliches and a lot of junk from Hemingway featuring "death the whore." Much of the story is told as if it were a script for a film, starring wonderful Stephen. His wife, Clare, five months pregnant, has wanted an abortion, but he has prevented her from getting it, so obsessive is his desire to have another child to replace his daughter, now living with his ex-wife. Stephen gets his wish, in baby Jonathan. Later his present wife Clare, gets hers too as she slits her wrists tidily in the bath when Jonathan is five months old, thereby allowing her self to stop the incessant wringing of hands she has taken up to complement her chanting of nonsense verse from Lewis Carroll.

The other male narrator, an unnamed 25-year-old Jewish man, has kidnapped his daughter, Kimmy, from her gentile mother. Gibson sets the story on a remote farm, 8 miles from a city, as the narrator waits for the police to discover him and his daughter. Gibson uses Kimmy to reveal the mother's incompetence as a parent. Brenda, the child divulges to her father, is promiscuous, a drug-taker and a bad judge of adult men. The narrator of "A Trip to the Casbah" had begun to think of Brenda as the white Toad when he lived with her. His dehumanization of Brenda has not yet infected his relationship with Kimmy, but it will, it will.

These stories are filled with tiring, exhausting wars. The sex war rages, and women don't usually win, for they are raped, strangled, made to bear children against their wills. Parents abuse their children emotionally. The doctors put as we say, heavy trips onto their patients. Husbands despise wives. Brothers hate sisters. But mothers, even when treated satirically, tend to have less scorn heaped upon them by Gibson. Indeed, the women who achieve something positive are the mothers.

Survival, in the end, is a chief virtue and is the greatest achievement of Gibson's characters. Yet the book is not filled only with despair, for Gibson creates and maintains a lightly ironic, comic tone. The reader puts down the book delighted not to be infected with madness. Yet Gibson has made us look straight into the minds of some mad, obsessed people and has successfully made her claim for their essential humanity.