When Dr. John K. Davidson first arrived in Atlanta, Ga., 11 years ago to set up an experimental clinic for diabetics, he recalls that he cheerfully distributed meticulous eating and cooking instructions to his patients and then watched helplessly as they, just as cheerfully, dropped them in the trash bin on their way out.

And even the ones too polite to throw them away would take them home and tuck them away carefully in the family Bible.

Dr. Davidson quickly discovered that a good many of his patients at Grady Memorial Hospital, the teaching hospital for the Emory University Medical School, could neither read nor write.

And even the ones who could, either could not afford the suggested foods listed on the diet plans, or found them just too "alien."

"We weren't having too much success," said Dr. Davidson, conceding a certain understatement. "The first thing we were made aware of was that we weren't doing very well on advising people how to cope with their diabetes."

Dr. Davidson can afford to look back on the clinic's early failures with some humor. What he learned from those early stumbling efforts led him to breakthroughs that are quietly revolutionizing the treatment of adult-onset diabetes, the disease that hits hardest poor, overweight, nonwhite women over 40.

And the Grady Diabetes Clinic has had sensational success: A whopping 80 percent of patients who lost weight maintained the loss over an eight-year follow-up period. This includes patients taken off insulin eight years ago whose weight is down by 90 pounds and whose blood-sugar level is down from a measure of 600 to under 100, patients with no therapy except weight-loss, a balanced diet and an exercise program.

Dr. Davidson believes his demonstration that diet and weight-loss virtually cure adult-onset diabetes combined with the equally dramatic work - to the biochemical set - on insulin receptors being done at NIH, renders "the whole fracas," surrounding certain oral insulin stimulants "irrelevant." His patients are off drugs as soon as possible and his work has demonstrated that once a patient is on a balanced diet the blood-sugar level drops even more precipitously than the weight.

Those first diets Dr. Davidson handed out were balanced, too, of course, to the last milligram, to the final calorie. But they were couched in the language of a college-level, required-credit nutrition class. And many of the foods they talked about had almost no relevance to the lives of the mostly poor, mostly black, about half illiterate diabetics who came to the new clinic for help. Moreover, most of the patients were older and their eating habits - by and large responsible for their illness - were of long standing.

Over the first few years Dr. Davidson built up a staff of nine nurse-practitioners and five registered dieticians who now help him serve the clinic's 8,600 diabetics, most of whom have the weight-related, adult-onset type.

And he built up a system of communications between the technical staff and the patients. First he and his staff questioned new patients about what they liked to eat, how often they ate, how they cooked, how they measured, all the little secrets of the kitchen that spell the difference between food and good food.

Next, in the most scientific way, the Southern food-staples and favored foods of the area and culture were measured and weighed and analyzed according to their nutritional worth and finally - and certainly most importantly for those with reading difficulties - the foods were pictured on brightly colored pages in the proper portions, arranged together with the foods that can be interchanged. Thus, on a page with what is called by dieticians a "low-fat meat exchange," there are pictures of, for example, a small slice of roast beef, a slice of fish, five small shrimp - and "one slice hog maw."

On the "saturated-fat" page there is a slice of bacon, a teaspoon of mayonnaise and a slice of fatback and one teaspoon of cracklins.

Grits are right in there with bread, potato, corn, lima beans and the like.

Moreover, there are inch-square stickers, each with a food picture representing the various exchange categories on it, and a number - indicating how much of the foods of that category should be eaten.

According to Jim Johnson, Dr. Davidson's devoted administrator (who whispers to an interviewer, out of earshot of the doctor, that Davidson has just received a major award for his work in controlling diabetes), this is how the Grady clinic works:

A new patient arrives at 7:30 a.m. He or, more likely, she, will have a complete physical, including a glucose tolerance test, and the examining physician, according to the person's history of health, diet, allergies, and so on, will prescribe a diet.

The diet goes to a nurse-practitioner and a dietician to whom the patient is then assigned for the duration of treatment. The patient will see the same nurse-practitioner and the same dietician at each subsequent visit.

Between the two, the patient not only receives understandable instructions for following the diet, but also gets cooking instructions and help in incorporating the diet into the patient's - and family's - particular life-style. The patient's first day does not end until 4:30 p.m.

Dr. Davidson and Mary P. Goldsmith, consulting dietician of the Diabetes Unit, have prepared a policy and procedure manual for use by those treating diabetics and have put together the Diabetes Guidebook: Diet Section. Davidson found that though the picture-exchange idea was devised for helping the either illiterate or non-English-speaking patients, it quickly became popular with the highly educated, sophisticated victim. A third, expanded and updated, version of the guidebook has just been published and may be obtained for $11 (including postage) from James L. Johnson, Diabetes Unit, Emory University School of Medicine, 69 Butler St., S.E. Atlanta, Ga., 30303.