Literature came out to encounter the real world in Washington Saturday -- that is, if Dupont Circle is the real world. Neatly spread out on the grass at the north end of the circle were some 50 booths and tables where small publishers -- mostly from the Washington area -- were displaying their wares. At the south end, by late afternoon, a football team was practicing in full uniform.

In the middle, balancing neatly between the intense physical action on one side and the literary browsing on the other, poets at the base of the fountain were reading into a portable sound system.

All the literary activity was connected with the Washington, D.C., Book Fair, which displayed the work of local small publishers, and a few from such places as Philadelphia and Ithaca, N.Y.

The show was impressive in its variety and quality. Not long ago, many of these books would have been mimeographed or photocopied, held together with staples, ribbons or paper clips. Nearly all of the small press books and magazines in DuPont Circle Saturday were professionally printed and bound, many with a quality of paper and design superior to much of the big publishers' products, and frequently, particularly in the poetry, with a level of writing to match.

Browsing the tables, a reader picks up Rod Jellema's new "The Lost Faces" (Dryad Press) and watches the virtuoso poet deliberately make his lines crackle with some of the most brittle-sounding words in the language: "Listen: that clarinet is curling/green and tart its thin-lipped gripe/around the brass that pushes it . . . " Or Ruthellen Quillen in "The Bell Witch" (Sybil-Child Press) fixing a gesture and a feeling in a few sparse, precise lines: "Your hands/hold my face/the way the mouse held its bit of corn/against the length of winter."

The eye is drawn spontaneously to the handsomely produced "The Unicorn and the Garden" (The Word Works, Inc.), with the head of a unicorn embossed on its cover. It is an anthology of the poetry readings given at the Textile Museum from 1973 to 1975 under the direction of the book's editor, Betty Parry.

According to the International Directory of Little Magazines and Small Presses, whose 15th annual edition is now being prepared by Dustbooks, a small publisher in Paradise, Calif., there are slightly under 2,000 small publishers in the United States, the number has approximately doubled in the last five years, and the average life-span of a small press is 4.9 years.

The director is certainly incomplete, as is an estimate that there are about 100 small presses in the Washington area -- roughly from Manassas to Catonsville.For one example, neither the directory nor the people in DuPont Circle had ever heard of Birchbark Press, directed by John Glad of the University of Maryland, which publishes each year two or three volumes of Russian poetry, in Russian, written by emigre poets.

Although its field is even more esoteric than most small publishing, Birchbark shows most of the special characteristics of small presses, including an "outsider's" feeling about most other publishing, an almost fanatical concern for the quality of the material published and a careless disregard for profits.

"Our latest volume is 'Antithesis,' a collection of poems by Igor Chinnov, whose name is never mentioned publicly in the Soviet Union although more than 80 articles on his work have appeared in Europe and America," Glad explained. "We had 1,000 copies printed, most of which will be given away -- we haven't even decided yet what the price will be. If we're lucky, perhaps 50 to 100 copies will find their way into the Soviet Union, where they will become collectors' items. Some of Chinnov's poems are already circulating in 'samizdat,' (Soviet underground publishing) and we hope that the whole book may get that treatment. If you think that printing 500 to 1,000 copies is small publishing, think about samizdat -- one typewriter and maybe seven or eight carbon copies."

Even the underground has its establishment. In Washington, the insiders among the outsiders include Word Works, Dryad, the Washington Writers Publishing House, Aleph and Sibyl-Child, which are the most likely to be encountered in a library or a bookstore, to get government or foundation grants or to be seen outside the Washington area. Word Works, for example, established in 1975, has been given official status as a nonprofit organization with a literary function, is also distributed in New York, San Francisco and London and has placed books in about 50 university libraries.

The 11 titles it has published so far show a growing attention to production values and an increasing role for the house's graphic designer, Paris Pacchione. The earliest volumes are simple and austere in appearance, while the more recent ones are designed for eye appeal.

Among the less-known but widely respected Washington publishers are Anemone, Sun and Moon, Vort, Gargoyle and Windmill; Nethula has published only two magazine issues but is showing rapid improvement. In a class by itself by Washington poets, is Black box, which issues its poetry not on the printed page but on tape cassettes.

Asked how they differ from large publishing houses, such as Doubleday or Random House, the small publishers will often say first that they don't usually print many books. Most of them issue only two or three titles a year, in 500 to 1,000 copies. Economically, they often have to wait for money from the last book to come in before they can afford to print the next one. They generally feel that distribution is their biggest problem -- that many more readers are out there waiting to read their material -- if they could only hear about it.

Books in the traditional format were only a part of the exhibit. One collection of poems was printed as a set of postcards, with graphics integrated into the text. Broadsides, containing one or two poems, were being distributed (often free) at many of the booths, and quietly working at one table was the smallest small publisher of them all, Barbara Baron of Bethesda, who hand-copies her chosen texts in multicolored inks and medieval-style printing, decorated like ancient illuminated manuscripts with fantastic plants and animals crawling in the margins, between the lines and up and down the large capital letters.

Most of the poets on display were of the serious, dedicated type, but one booth, labeled "Museum of Temporary Art," featured the other side of poetry, brash, Bohemian iconaclasm."Creeping Heterosexuality: America's Number One Problem," was the title of the lead article in the latest issue of its magazine, MOTA.

Eric Baizer, proprietor of the magazine and a bit of a mad genius, was talking to a browser: "My next big project will be the ultimate self-help book. I plan to call it, 'Beyond Assertiveness Training: Murder without Guilt.' Then maybe I'll be able to buy a condo."

"We've come a long way in a few years," says Al Lefcowitz, founder of the Writer's Center in Glen Echo, wandering among the exhibits and examining the books with a critical eye. The Writer's Center is partly responsible for the improving technical quality of local small presses. With approximately 50 presses affiliated, the center offers instruction on typesetting, design, graphics and printing, and has equipment that will allow members to do most of their own production work, and mailing lists.

Despite the increased emphasis on professional techniques, spreading the word is still at the heart of the small publishers' concerns -- not only in poetry but in a wide variety of subject matter: third-world and women's liberation militancy, pamphlets from the Folger Library on such topics as music in Elizabethan England, quite a few short stories (whose outlets in mainstream publishing are slowly drying up), and even a few plays and novels.

"Thank God I'm in a field where there is really no such thing as making it big," said one of the poets at the fair, looking around the busy tables. "And thank God that there are some publishers that haven't become part of conglomerates and that don't have to worry about making a profit."