BREAD AND CHOCOLATE: Dupont Circle.

"Bread and Chocolate" takes place in Switzerland - land of majestic Alps, milk chocolate, fine watches and illegal aliens.

Yes, illegal aliens. Those chocolate bars and watches are dependent on cheap foreign labor, and lurking beneath the picture postcard beauty is an economic subculture of job-hungry Italians, Turks and Greeks. "Bread and Chocolate" offers us an insight into this working-level Europe, and the inevitable clashes that result when two cultures collide.

But "Bread and Chocolate" is not a breast-beating sociological treatise. It's done with great warmth and perception.

The story is told through the experiences of Nino Garofoli, a southern Italian laborer who leaves his wife and children at home in the time-honored manner and emigrates to Switzerland as a "guest worker." He's very conscious of his underdog status as he tries, to the point of obsequiousness, to ingratiate himself - after all, he needs a job. "You're Italian?" a Swiss policeman asks him one day. "nobody's perfect, Commissioner," he answers politely.

Italian film star Nino Manfredi plays Garofoli with a combination of tenderness and earthiness that is instantly endearing. Director Franco Brusati (with whom Manfredi collaborated on the script) has avoided the obvious pitfalls and presents Garofoli as neither an uncouth boor nor a goody-goody sap. He is a decent, caring person who happens to wear purple shirts and urinate in public parks.

It's a schizophrenic existence. Garofoli tries hard to adapt to their squeaky clean culture - he's unfailingly polite and he's extra careful not to litter. In the end, the Swiss view of Italians as dirty and lecherous is too much for him. Despondent but finally freed of the need to grovel, he lives up to their expectations, pinching behinds and kicking over trash cans with glee.

Through it all, he manages to retain his philosophical outlook. "Oh well," he shrugs after another unpleasant encounter with his hosts, "if the Pope picks them as his guards they must have some qualities."

It's this careful balancing act on the thin line between comedy and tragedy that gives the film of illegal immigrants who live in a chicken coop ("The owner offered us a house," they explain, "but we would've had to pey rent"), is a comedy classic. The grizzled farmer, who acts as if he's plucked one chicken too many, takes Garofoli on a tour in hopes of having him join their group. They walk through a shed where feathers fall like confetti ("And here's where we take the feathers off . . . it's just like a party!") to an outdoor clothesline where hundreds of raked chickens hand by their feet, and the farmer explains how their day goes. "We get up when the cock crows . . . " he starts. ". . . Then you kill him," Garofoli adds helpfully. As the workers take on the characteristics of their chicken charges the scene dissolves into hilarity. Then, abruptly, it shifts to a dreamlike sequence when the farm owner's children arrive on horseback for a picnic by the stream. The contrast between the healthy blonde beauties and the ragged, toothless Italians peering throug the chickenwire is heavy-handed - but profoundly moving.

Similarly affecting is the funny/sad bar scene in which Garofoli, having dyed his hair blonde in one last, desperate attempt to belong, "passes" as a Swiss citizen. He gets along fine until he look up at the waiter serving him - an italian.

Many of the situations stand as set pieces in themselves. Garofoli's adventures as a waiter in a fancy restaurant, as butler to a wealthy Italian financier, as woker in a labor camp straight out of Appalachia - these are not quick sketches, but carefully crafted vignettes of the alien experience.

"Bread and Chocolate" gives us the inside story of the immigrants' situation, and for this reason alone the film is worth seeing. With its added touches of warmth, humanity and, above all, humor, it's an absolute must.