The newspaper's headline is ominous: "Two Dacron Women Feared Missing in Volcanic Disaster." A subhead beneath it tells a bit more: "Japan Destroyed."

A strange way to report the news, but such are the ways of the Dacron (Ohio) Republican-Democrat, the National Lampoon's just-published Sunday newspaper parody that all too often scores a direct hit on the way the fourth estate dishes it out in Middle - and often not-so-middle - America.

Consider this correction, typically buried inside the tabloid's Metro section, in minuscule type:

"Arnold Piesner of 1554 Woodrow, Dacron, did not commit a violent act of homosexual assault on his next-door neighbor's 7-year-old son as was erroneously reported in Friday's Republican-Democrat. The assaulter was a Mr. Andrew Neeber and the incident took place in San Jose, Cal. We regret any inconvenience this error may have caused Mr. Piesner . . ."

Meanwhile, the paper's Living Life section "formerly the Women's Pages") offers important service features. "Is Your Child a Dip?" warns of some of the telltale signs of encroaching neuroses: "Does your son refuse to fight smaller boys" or "willingly wear hats with fold-down ear-flaps?" The Collectable Column's Carmela Savin has some good investment tips:

"Q: I collect soda and beer can poptops. Are they worth anything?

"A: Some are quite rare. I have a list of these available for only $3.49 c/o this newspaper."

Parody (and National Lampoon) editor P. J. O'Rourke says he conceived the eight-section newspaper "On New Year's Day, 1975, when I was snowed in Lincoln, Neb., with my cousin Tom who's a banker and my aunt Peggy and there was nothing to do between football games except think about the 13-year-old girl who lived next door, and that seemed like trouble."

Instead of taking a cold shower, O'Rourke sat down with the Lincoln and Omaha papers and "made a list of as many types of stories and ads that I could find in those papers. My original idea was to get real journalists together and do the (parody, but by 1976 we still couldn't figure out how to put it together.

"Then William Attwood, the publisher of Newsday in Long Island, put together a lunch for a few of us at the paper. He had all his editors in, and managing editor Lou Schwartz was particularly helpful. He said, 'Go for the local hooks,' the idea that only local angles sell papers. That's why there are stories buried on page eight that say, 'Elebendy billion dead in rural China.' Who Cares about dead Chinamen in Dacron, Ohio?"

Particularly when so much happens in Dacron itself, the mythical home of Dacron High, whose 1964 High School Yearbook has sold 1.6 million copies since the Lampoon published it in 1974. Every member of the graduating class shows up in the paper, including - on page 2 - the librarian who claims that she was abducted to the dark side of the moon by Venusians and "sexually tampered with."

While some of the parody's humor is in questionable taste, and the sins of newspapers are exaggerated into gleeful grotesquerie, there are moments when one is struck by the Schlock of recognition:

A four-color advertising supplement of dubious value; for Swillmart, "Where Quality is a Slogan," offers Meat. Space age rubber by-product lasts 5 years without refrigeration." A one-pound "wad" is "just 33 cents."

The consumer service Action Finger, ever guarding the interests of readers, informs the parents of a boy dying of bone cancer that Reggie Jackson will certainly phone their son at the hospital - "for $5,000, $1,500 for a letter and $55 for a get-well card."

The upstanding paper salutes its paperboy of the month, Sean Bartlet, 12, "a thin, handsome young towhead with a jaunty upturned nose, interested in sports, especially Trailers Basketball, which he'll be watching tonight with friendly Republican Democrat publisher Rutgers Gullet, pictured above."

Self-serving letters to the editor: "You certainly have a wonderful newspaper," writes Elinore Hoppit. "I read it every day and love it." Bill Grewel observes that "even though the potholes in front of the Post Office on Monroe Street haven't been fixed, America is still a great Nation."

The un-rewritten press release, proffered as a public service: "DentaTred, a national chain of automotive tire dental offices, will open four DentaTred drive-in auto dentistry locations in Dacron within the next few months according to William Havitts. DentaTred vice-president in charge of Southern North-East Mid-West region. "Tire treads need a dentist just like your teeth do because tire treads can be crooked, need cleaning, have cavities or have to be re-capped just like your teeth," says the DentaTred V.P."

The Sunday Week magazine section epitomizes freedom of speech in a controversial article, "Dacron's Gay Scene: They don't really seem to be very happy at all," with this editor's note: "In keeping with the tradition of free speech, we have published Ms. Palooka's article taking out only those pages deemed offensive. The editors and publisher of the Republican Democrat do not in any way agree with her at all but had no time to assign another story. You are invited to exercise your free speech and tell us not to do it again."

The comics section stimulates the mental processes of children with its Uncle Bunk feature ("@) 1978 Child Labor Enterprises") and a quiz. "Unscramble these things that are part of a lobster 1) sclaw 2) sye 3) sleg 4) mells. Color the lobster, unscramble the words, decorate this entry with paint, crayons, mom's makeup, things from the kitchen or folded paper money and mail before 5 this afternoon to Uncle Bunk c/o this newspaper. First prize peashooter with 5,000 peas; second prize 100 pipe cleaners."

Those wonderful medical advice columns: The Family Dentist, "a public service of the National Family Dentist Association," answers four questions with these answers: "Better consult your family dentist." "Frequent visits to the family dentist can often prevent or cure a condition such as this," "Sounds like a job for the family dentist!" and "A difficult question. Your family dentist will have the best answer."

Household hints? "Today's pattern: A handy nose mitten." Le Home Decor suggests that "drawer Bibles make tasteful and inexpensive accent pieces." Household Hanna reports that, "You can save a lot of clean-up work if you feed your children in the bathtub.When they finish, turn on the water."

More dubious ads, from Look-Nu Auto Parts: "Six-Year Warranty on Notarized Page of The Bibles, Electro-Dictator, the very finest battery for the driver who would like to turn off the engine sometimes and run on electricy alone. Reg. $78.50, $24.98 cash exchange with this ad or piece of paper."

Filling a page with local high-school news, this from the Silage County Rural Consolidated High School: "Luke Dubber's prize heifer up and died on him last week and that sure was a shame."

Real estate advertising that capitalizes on unorthodox sales gimmicks: "The famous Fazullo Murder House is on the market at a price that's too good to pass up. This three-bedroom, 2 1/2 bath home has been in newspapers and on TV state-wide. Formerly owned by Vito Fazullo, reputed Dacron 'under-boss of under-bosses.' A real conversation starter. H1 90s."

Addictive tidbits used to sell national sunday supplements crammed with ads, like "The Half a Book of the Month Club" and "The Great Book Edges of the Western World" and "The Guilty Christian's Fund." To wit, Sir Walter Scott's Personality Pomade:

"Q: What is the theory of relativity. Please explain."

"A: The theory of relativity states that everything is relative."

As Henry Ward Beecher observed a century ago, "Newspapers are the schoolmasters of the common people," a thought echoed by Will Rogers 40 years later when he said, "All I know is what I see in the papers."

And re-echoed yesterday by Parody editor P. J. O'Rourke when he said, "I just wanted to make a lot of little points."