IN THE PAST three or four years, the boundaries of Capitol Hill have been stretching east and north. The astronomical prices of houses "in the shadow of the Capitol," as the For Sale ads say, have forced young (for which read not wealthy) remodelers to buy in areas farther and farther out.

That the Hill is growing and spreading can be seen in this year's Capitol Hill House Tour, 1 p.m. to 6 P.m. Sunday, May 8, in which almost half of the houses are in, as they say, "developing area."

"It's still possible for a young couple with not too much money to buy on Capitol Hill," architect Charles Dupwe said recently. "They just have to look further out and be willing to buy property that is in really bad condition that no one else has had to courage to take on."

The second condition that makes it all possible on Capitol Hill are the so-called "English basements," the windowed lower floors remodeled into income units that traditionally on Capitol Hill are rented for $250 and up to help pay the home improvement loans.

But most of all, it is the sweat of their brows and the dirt on their hands that makes it possible for people of average Washington income to afford the convenience and pleasures of living on Capitol Hill. Jane and Thomas Wheeler, like Dupwe, are typical cases. Their remodelings, each of row houses, are remarkably similar.

The Wheelers had been renting a house on D Street SE and keeping an eye out for a house when they came across the one they bought on 13th Street SE. The house already had been partly gutted, but as often happens on Capitol Hill, the owner hadn't been able to go any further. The house, on an 18-by-100-feet lot, was built in 1904. William Webster was the architect.

The Wheelers paid $46,000 for the house, and practically the same minute called for help from an old friend, architect Edward Payne of Silver Spring. Jane Wheeler and Payne's wife had gone to school together. So Payne had more than the usual insight to just how honest the Wheelers were when they told him "This is the way we live, and this is what we need in a house." Even so, it took a month and a half of joint soul searching before the plan was set.

The Wheelers wanted a really big space for parties - as big as you can get in a 18-feet (not counting the width of the walls) row house.

"One big advantage to these houses, and what makes everything possible," explained Payne, "is that they are mostly 'clear span,' meaning that the interior walls aren't load-bearing, so you can do all sorts of interesting things with the spaces."

You enter to the side of the Wheeler house through the old vestibule with its original tiles still intact; you then pass an angular wall, which serves as a photo gallery, and then a tuck-away half bath. Then the space explodes upward into the central stairhall, which serves as the heart of the house.

The large kitchen - for cooking for the parties favored by the Wheelers - is where the living room once was. There is a round table by the front windows on the street side of the house. A splendid counter turns the corner at an angle.

Straight ahead is the dining hall and sitting area, side by side. Down six steps is the living room in what used to be a dirt-floored crawl space. The basement (a neat two-room rental unit with corridor kitchen hallway left over from the utility room) is under just the kitchen and dining room. The living room ceiling is about 16 feet high. The Wheelers use the tall wall for their collection of modern art poster.

Because the sitting/dining/living space flows together, the Wheelers achieved the large entertaining space they wanted. The furniture is tucked against the wall - the sofa make an "L" - leave as much circulation space as possible.

On the garden side of the room are tall, skinny doors, custom-made by Triangle Pacific millwork.

Upstairs, a large master bedroom, a few steps up from its dressing room/closet/bath, spreads cross the back of the house. Soom (perhaps in time for the house tour) a deck will open out from here. At the street side are two smaller rooms and bath. One is an office, the other for the junior Wheeler expected to move in before too long. Up above the street-side rooms on the attic level is a grand loft, all carpeted so anywhere you sit is a skylight. The expected Wheeler should find it a spendid hideaway, say about six years from now. In the mean-time, the adult Wheelers find it a great place to watch television.

All of this was not accomplished over the telephone. Tom Wheeler, executive vice president of the National Cable Television Association, and Jane Wheeler, a public relations executive, learned a number of new skills, including how to tear things down. The Wheelers began to finish the demolition and move in at the same time, in September 1974, to save money and be closer to their project.

At the beginning, two rooms - the small upstairs rooms - and a bath were semi-habitable. "We slept, ate, cooked, entertained all in this small space. We had some great parties, as a matter of fact," said Jane Wheeler.

For better than a month, the only way of getting up to these rooms was on a ladder. "I got used to it. I'd just climb up and dust off," she said. They cleaned the broken plaster off the brick walls, leaving many of them bare, including the strange indentations and channels left by the long-gone ducts and pipes.

Tom Wheeler laid the tile and the carpeting and installed the toliets. They did let three small subcontracts, which, according to Payne and Jane Wheeler, involved "a lot of giving them hell on the phone. The problem was to get the lowest price. We accepted contractors from small outfits who used us a fill-in work, So they just came to us when they didn't have anything better to do. The work really took twice as long as it should have."

In all, the remodeling, with the Wheelers' own hard work thrown in free, amounted to about $30,000, which with the purchase price, brought their total investment to about $76,000.

Hanging in the kitchen right by the door is a color picture of the house in its early demolition stage, lest the Wheelers ever be tempted to take on such a project again.

Charles Dupwe belongs to that select group of remodelers who has done it twice. A few years ago, he bought a house on Capitol Hill and worked part time for five years remodeling it while employed full-time as an architect with the finish the demolition and move in at the same time, in September 1974, to save money and be closer to their project.

At the beginning, two rooms - the small upstairs rooms - and a bath were semi-habitable."We slept, ate, cooked, entertained all in this small space. We had some great parties, as a matter of fact," said Jane Wheeler.

For beter than a month, the only way of getting up to these rooms was only way of getting up to these rooms was on ladder. "I got used to it. I'd got used to it. I'd just climb up and dust off," she said. They cleaned the broken plaster off the brick walls, leaving many of them bare, including the strange indentations and channels left by the long-gone ducts and pipes.

Tom Wheeler laid the tile and the carpeting and installed the toliets. They did let three small subcontracts, which, according to Payne and jane Wheeler, involved "a lot of giving them hell on the phone. The problem was to get the lowest price. We accepted contractors from small outfits who used us as fill-in work, So they just came to us when they didn't have anything better to do. The work really took twice as long as it should have."

In all, the remodeling, with the Wheelers' own hard work thrown in free, amounted to about $30,000, which with the purchase price, brought their total investment to about $76,000.

Hanging in the kitchen right by the door is a color picture of the house in its early demolition stage, lest the Wheelers ever be tempted to take on such project again.

Charles Dupwe belongs to that select group of remodelers who has done it twice. A few years ago, he bought a house on Capitol Hill and worked part time for five years remodeling it while employed full-time as an architect with the Department of Housing and Urban Development.

Rather weary of it all, he quick his job, went to Europe to rest up and came back just in time fo the recession, which hit architects particularly hard. Undaunted, he bought his current house, a typical two-story and basement it full-time. It took 2 1/2 years, with him doing the major part of the work except for plumbing, electricity and heating. He was just as glad to go back to work away from home with LBC & W architectural firm of Alexandria.

"I was able to buy the house because it had suffered a bad hot flash fire. Still there was a good bit of interesting old woodwork left, which I stripped where I could," Dupwe said.

From the outside, it is clearly recognizable as an architect's house. The door is made of old-fashioned horizontal pine porch siding, used vertically. The transom above has the numbers in a stylized overlapping graphic.

Coming into the house, it can be seen that his plan has some similarities to that of the Wheelers. Both he and the Wheelers have used walls set at interesting angles to break up the house's essential stern regularity, and they make use of every inch of space.

His kitchen is also at the front of the house, with a table at the window for breakfast and sidewalk-watching. One thing Dupwe likes about the block is that the mostly young residents tend to have occasional impromptu sidewalk picnics.

The dining room is on the same level. The working fireplace has a rather fussy Victorian mantlepiece. The window has old interior shutters. The furniture here, as with that in most of the house, is picked up from house sales, the Goodwill and Salvation Army.

One wall of the dining room overlooks the 12-feet-high living room, lowered 2 1/2 feet into what once was crawl space, similar to the Wheelers'. Dupwe poured the concrete slab himself and laid the slate floor. He used the old floor joists to make bookshelves over the fireplace at the end of the room. On one side is a loft, reachable by a ladder - actually the roof of the garden tool shed that opens outside. Dupwe thinks of it as his library and sometimes curls up there to read. Tall windows with arched tops help preserve the flavor of the house.

The steps down from the dining room provide space for bottle storage. A bar, with a working sink, is tucked into the adjacent corner.

The living room rug is another Dupwe bargain - it's put together out of carpet samples attached with rug tape.

Upstairs are three rooms. The studio has a sleeping loft (reached by a ladder whose steps are actually the jigsawed numbers of the house). The large master bedroom has a king-sized platform bed built by Dupwe; a sauna, also a Dupwe achievement; twin walk-in closets (for the future, says Dupwe, who lives alone), and its own bath. There is also a smaller bedroom and more walk-in closets plus a bath.

Downstairs, Dupwe has the usual rental unit, this one not really discernable from the street because its entrance is in a side passage.

Dupwe paid $29,000 for the house 3 1/2 years ago. He figures his remodeling, not counting his architectural design and work, cost about $30,000. He optimistically hopes he could sell it for $170,000, if he had plenty of time - a suitable recompense for his 2 1/2 years of hard work, indeed.

Other houses on the Capitol Hill tour are: William Creager's art deco decorated house; Douglas Hendershot and William Aldrich's three floors of art and antiques; Mr. and Mrs. Spraque Thresher's elegant house with 12-feetceilings; Mr. and Mrs. Edward Rastatter's house with three-level master bedroom suite and a huge roof skylight; Mr. and Mrs. Robert Moore's house with regency period antiques; Ray Dockstader's house with its collections of paintings, needlepoint and ceramics; Mr. and Mrs. Joseph Cunningham's eclectic blend of styles; and St James Church and Rectory, a late 19th-Century complex.

The House Tour benefits the Capitol Hill restoration Society Defense Fund (which currently is supporting city permit parking, the Historic District and other local measures). The tour stars at Eastern Market and proceeds by minibus. Transportation from the market is included in the $8 ticket price. Tickets are $7 if purchased in advance by writing Capitol Hill Restoration Society, Box 9064, Washington, D.C. 20003.