The nondescript five-story building which houses the Mudd Club is marked only by a dilapidated, barely legible sign: "Reem Paper Corporation." No such company resides on the premises. Reem is one of many phantoms in this rundown section of lower Manhattan, made up of warehouses that are either abandoned or have long since been converted into artists' lofts.

The Mudd Club bucks convention in other ways, too. It does not open for business until midnight. The owner, Steve Maas, generally checks in around 1:30 a.m. and in keeping with club policy not to advertise, the sole evidence of its existence are the small black letters "MCL" (Mudd Club Lounge) on a dirty plate-glass window and a recently installed chain barrier, a la Studio 54, across the entrance.

Before midnight, the only sign of life on White Street is likely to be a wino crouched in a doorway. But from the witching hour until 6 a.m., the dancing and drinking in the Mudd Club spills out onto the street, leaving a cluster of would-be partiers milling about in the hopes of getting inside, to rub shoulders with the likes of David Bowie, Mariel Hemingway, Andy Warhol, Adolpho, Carol Lynley, Diane von Furstenberg, Brian Eno, Keith Carradine or Dan Aykroyd.

The Mudd Club has become the new watering hole not only for New York's undergound intelligentsia but also for many urban sophisticates who would rather fight the crowd here than at Studio 54. If your face is not familiar, getting into the place can be as tough as getting into "54." As club regular Jeffrey Vogel, U.S. manager of Ze Records, put it, "Recognition at the door is the acid test of where you stand on the below-23rd-Street hierarchy."

Once inside, the uninitiated might well wonder what all the fuss is about. A small, rectangular room (which should not, but frequently does, hold as many as 400 bodies), it is not so very different from other so called punk clubs which the Mudd Club has to some degree supplanted.

A neat row of disturbing black and white photographs line otherwise empty black walls, running up to the ill-defined dance floor which takes up most of the space between a long bar and the stage. By 2 or 3 a.m., the floor is generously littered with bottles and cigarettes.

Even when the toilets are not backing up and no one is spraying mace at the deejay, as some irate dancer recently did, Maas has his hands full with crowd control and maintenance. The damage sustained by the club, which is open seven days a week, is so extensive it requires massive rehabilitation daily to keep it operable. Only by painting the walls an average of once a week is the rampant graffiti kept from giving the club the appearance of a New York subway car.

Absent, for the most part, is the Bowery sleaze which pervades such rock clubs as CBGB's or Max's Kansas City. If the Mudd Club clientele are sleazy, they are that way by design, carving out a niche that might be dubbed sleaze chic. Designer dresses co-mingle on the Mudd Club dance floor with leopard-skin pantsuits; carefully coiffed hair bobs in unison with multicolor dye jobs. The unisex bathrooms are used for more bodily functions than just the basic ones.

"For a while," says Ernie Brooks, bassist for The Necessaries, a rock band, "the men's room was so digusting, everyone just used the women's room. Now they are equally disgusting."

In fact, a recent edict against fornication in the bathrooms has inspired some couples to protest. The Mudd Club is a scene.

It is easier to pinpoint why people hang out at the Mudd Club than it is to define who these scene-makers are. There is a definite bent for outrageous clothing but not everyone inside shops at Manic Panic. For every person walking up in Soho chic dress of blue jeans, striped T-shirt and white Capezio shoes, there is another climbing out of a limousine in formal attire. "The crowd we get is a cross section," say Maas, "from rich Park Avenue girls who go to Studio 54 to drag queens to hard-core rock musicians and their groupies." Among those who used to frequent Studio 54 but now can be found bopping at the Mudd Club are Ronnie Cutrone, an artist and assistant to Andy Warhol who helps Maas book talent into the club, and Wendy Whitelaw, a high-fashion make-up artist who prefers the Mudd Club because "you don't have to be fabulous there. It's not bourgeois like 54." The club also has weaned people away from CBGB's and Max's Kansas City, refugees from a movement that never happened.The Mudd Club definitely has profited from punk's demise, which left many young New Yorkers all dressed up with no place to go.

Live entertainment is important, but not paramount, in the Mudd Club scheme. A deliberately diverse array of artists have graced the club's small stage, from Sam & Dave, The Shirelles, Clifton Chenier and Professor Longhair to John Cale, Joe Jackson, The B-52s, Tin Huey and D.C.'s own Urban Verbs. But just as often, live music gives way to thematic parties which give the club an opportunity to unveil a rather caustic sense of humor. Among what owner Maas calls "our little icons of America" was a Joan Crawford Mother's Day party, for which 30 or 40 people came dressed as Joan Crawford and another 40 or 50 masqueraded as battered children, complete with pinafores and bandages. For its part, the club provided a nursery for the kiddies to be tied up in.

There was also a psychedelic "happening" featuring day-glo paint, black lights and tiny fake LSD cubes as well as a pajama party at which two uniformed policemen were given pj's and bathrobes so as not to put a visual crimp in the evening. A rock 'n' roll funeral party is in the planning stages. Informal fashion shows, exhibiting maverick Soho designers and underground stores with names like Asphalt Jungle and Manic Panic, also serve to set the Mudd Club apart from the norm. And, occasionally, the dimly lit room goes completely dark and the club becomes a theater. On view have been a Teamsters Union film on truckers and highway safety; a '50s educational film entitled "V.D., Your Doctor and You"; and a government film on the life-cycle of salmon, which Maas says is "fantastic to show with disco music, with all these amoeba-like paramecium throbbing and merging into each other."

But it is not economically feasible to put on special events every nights, so on most evenings the Mudd Club is satisfied to be a mere discotheque, sans the flashing lights of Hurrah's (Manhattan's first new-wave dance parlor) or the repetitive disco drone of Studio 54. Alternating disc jockeys David Azarch, 20, and Danny Heaps, 21, may be the club's most valuable assets, spinning a nonstop, eclectic amalgam of new wave, reggae, R&B, avant-garde, rockabilly and other danceables. Even when there is a group performing at the club, few seem to come expressly for that purpose. Robert Goldstein, prime mover of the Washington-based Urban Verbs, found the Mudd Club audience "non-involved." "That place doesn't depend on having a band," he says. "You don't need an excuse to go there. The only focus seems to be some vague sort of status." In effect, the whole club is a stage on which each customer reserves equal billing.

Responsible for much of this inspired mayhem is Maas, who hardly cuts the figure of your average nightclub heavy, being slightly built, soft-spoken and balding although he is just in his mid-30s. Originally from Macon, Ga., 10 years of living in downtown Manhattan has removed all trace of a southern accent.

Sitting in a living space above his offices on West 8th Street (sometimes used by electronic musician Brian Eno as his New York base of operations, he is too guarded to be completely cordial, as if worried that someone will at any moment attempt to steal his secret formula for success. Maas' LBM (Life Before Mudd) is a subject he won't discuss.

He ran an independent ambulance service before becoming involved in what The Village Voice termed "the Para-Punk Underground." It was in January 1979, at around the same time that he could be seen as a wealthy industrialist in Eric Mitchell's Warholian super-8 film, "Kidnapped," that Maas opened the doors of his new venture on a full-time basis.

"I had always been fascinated by the concept of a club," relates Maas, "and I did a lot of research in northern New Jersey industrial towns to find genuine sleaze, where people were attempting to be glamorous but weren't sophisticated enough to know how to do it . . . very friendly, homey bars. So I looked for an area that was abandoned, and in Manhattan the only area like that, besides the Piers, is near where all the government and court buildings are. I wanted a place where I wouldn't be bothered much."

One of the Mudd Club's decided charms is the inexperience of the management. Neither Maas nor any of his permanent staff of five has had any previous practical knowledge of the club business and Maas has to laugh when he thinks back to his initial investment, which was in the low five figures. "No one in their right mind, except someone who had never been in the bar/club business, would ever dream of approaching it with such a minuscule amount of money," he says.

But in this mercurial line of work, ignorance can be a blessing, and although six months' worth of construction, planning and applying for licenses greatly increased his expenditures, the Mudd Club may have passed certain obstacles because management didn't know enough to play it safe. And it is the quirkiness of the plafe, the dependence on word-of-mouth to find out what's going on there, the surprises cooked up by Maas and his growing coterie that, along with the dancing, have made the Mudd Club such an interesting place to hang out.

Success, predictably, has bred imitation. Uptown discos have copied the Mudd Club fashion-show format, featuring many of the same designers, while new rock clubs such as the Zu Club and the Tomato Club are attempting to put together Mudd-type environments. But Maas is too busy concocting the club's future to care what the competition is up to.

Construction is currently under way to turn the basement, now blocked off as a makeshift coat-check room, into a model bomb shelter for "hiding and thinking." World War II beds with metal covers food rations and Geiger counters are among the paraphernalia involved, some of which was left over from a time when the basement at 77 White Street was, indeed, a civil defense shelter.

There will be more video presentations of varying types, Maas promises, in keeping with his intention to provide a forum for undiscovered talent. And in response to increased interest from the record companies, which have recognized the value of this trend-setting showcase, he is also toying around with the idea of booking more live acts, perhaps to play at the unthinkably civilized hour of 9 or 10 p.m. In this regard, Maas sees himself, rather presumptuously, as a "consultant" to the record companies "so that they can see where the future is."

Drawing a deep breath, Maas says, "If I had known all the obstacles I would have to overcome, I never would have done it."

But it's difficult to feel too sorry for him. He is the sole proprietor of the in spot for late-night New Yorkers at the moment, offering just the right combination of music, spectable and status.

As John Cale, a legendary figure who has seen many such niteries come and go, said as he leaned on the Mudd Club bar, "It's a hole I'd love to own." CAPTION: Picture, Mudd Club patrons; by Marcia Resnick for The Washington Post