THE SCENE is the Fishery, the popular new fish restaurant on Connecticut Avenue just south of Chevy Chase Circle. A large group is seated together for a celebration. It is the family of O. Williams, who directs the Chevy Chase Seafood Market next door and supplied all the fish for the restaurant.

A dozen of those present have ordered fish. Williams asks for steak.

"I hate to say it," he explained last week, "but 14 or 15 hours a day working with fish is enough. If I go out for dinner, I generally eat a steak."

Williams is an unusual man in an unsual trade. A native of land-locked Oklahoma, he had been a court reporter, school teacher and Ralph Nader volunteer before he answered a newspaper ad and began work as a novice fish cutter at Cannon's Sea Food. That was 10 years ago, at a time when it seemed there was little future for fishmongers, small businessmen who sell fresh fish at retail.

Today there is considerable evidence to the contrary: The success of the year-old Chevy Chase Seafood Market, continued brisk business at other fish stores despite reocord high prices and news that Cannon's, the Fortunum & Mason of local seafood stores, soon will open a second Georgetown outlet and a store in Great Falls, Va. "I still love it," Williams said over coffee It was 9 a.m. and he had been up almost five hours. "I think this is the most fascinating business in the world."

His enthusiasm is bolstered, no doubt, by a realization that fresh fish is "in." Nutritionists recommend it; so do those who formulate diets. Restaurants of many nationalities feature it and home cooks are emulating the chefs. The sultifying local tradition of fry it or forget it is being overcome as they prepare French and Oriental recipes, entertain with Mediterranean fish soups and even serve raw fish marinated in lime juice. No longer is shrimp cocktail the alpha and the omega of seafood appetizers. One cause -- at $16.95 a pound cooked, shrimp costs too much; another -- as frames of taste reference broaden, shrimp cocktail is revealed as a very boring dish.

Nonetheless, selling fresh fish is a physically demanding and very risky business. Few raw foodstuffs spoil so rapidly or reveal it so dramatically when they have past their prime. The smell alone, even when the offending fish has been cooked, is unforgettable. "My employes don't even have to ask," Williams said. "If they have any doubts about a fish, they don't put it on display. I need repeat business to stay alive. My customers aren't impulse buyers. They've come for fish. If they don't like what they see, they'll leave and go buy something else."

Williams advises shoppers who enter his or any other fish market to check the firmness of the flesh (soft and mushy means bad news) and the color ("the stripes in a rockfish should be striking, bold, not faded," he said. The gills should be brightly colored). Shellfish such as clams should be tightly closed. Lobsters coming from a tank should not act sleepy. A distinct odor is a giveaway that the fish has been around too long, as is a slimy surface. The lack of clear eyes, another danger sign, can be misleading, he claims. "Keep a fish under ice all night and it still will be fresh," he said, "but the eyes will cloud over."

He feels many claims that his and other merchants' fish is not truly fresh come from mishandling by the customer. "Fresh fish doesn't age like beef," he said. "It just gets old. We keep pans of fillets on ice. We put whole fish under ice. Bacteria multiply very quickly on the surface of a fish. The melting ice washes the bacteria away. It will stay fresh for two or three days. But wrap a fish up, then leave it in a home refrigerator for even a day and it will get old very quickly."

Expert fishmongers such as Williams and Robert Moore of Cannon's, who taught him the business, understand the risks. They even profess to appreciate the demanding clientele they have developed. "People are more selective now," Moore said. "Getting fish is only half the battle. Most of my customers are very knowledgeable," Williams added. He grinned. "They fondle the fish before they buy it. They look it in the eye. Dealing with them is hard, though."

The customers aren't what has most fish retailers shaking their head in disbelief, though. The cause of their anguish these days is three monumental headaches that won't go away: uncertain supply, rising prices and an inability to retain qualified help.

Fresh fish doesn't come from a storage warehouse. Bad weather -- even high winds in good weather -- is enough to interrupt supply and send a fishmonger scurrying to the long-distance telephone. Also, there is the lengthening shadow cast by dwindling suply and increased pollution. Rockfish -- Chesapeake striped bass -- have been difficult to come by regularly for several years. The U.S. shrimp catch has been dropping at an alarming rate.

Fishing may be one of the last vestiges of the free-enterprise system. Men such as Moore and Williams still are able to shop around and minimize the number of middlemen between themselves and the man who nets the fish. "You look to buy from day boats [fishermen who go out and come back the same day]," said Williams. "I'm doing more and more buying directly from fishermen. I'm happiest with fish I choose personally."

"The people I deal with know me," said Moore. "I need products 12 months a year. If this man looks out for me when things are scarce, I'll stick with him when things are plentiful. You need people you can rely on when you are buying from New York or Boston or the West Coast. When boats are out for several days, they come back with a top, middle and bottom of the catch [the first-caught fish]. They have to sell it all, but I can only sell the top of the catch. They send it to me because we've done business for 20 years or more and because they know if it's not right. I'll nail up the box and say, 'Pick it up. I'm not paying for it.'"

"The only 'deal' in our business said Williams, "is performance. Most cut-price fish are either old or they've been frozen."

In time, revised off-shore fishing regulations and various experiments at farming fish may improve the supply situation. For the moment, though, demand outreaches supply and prices are up.

"Sometimes when I wait on a customer and calculate the price of a purchase, I feel guilty," Robert Moore said. "I remember what that fish used to cost. But what I paid for it, too, and I know I did more volume than ever last year and took home less money. I see catch reports daily and I don't think anyone is profiteering."

"I hate to say it," O. Williams mused, "but the price of fish is out of sight." On the blackboard in his store the largest shrimp were $12.99 a pound ("almost a dollar a shrimp," Williams said in a hushed tone), salmon and swordfish were $7 a pound and even perch fillet was $3 a pound. One factor, of course, is the fact that, if you buy fillets to avoid bones, they are all meat and represent about half the weight of the whole fish. Another, at stores such as Cannon's and Chevy Chase, is rent. A third is the high quality of paper products and plastic used to wrap orders. A fourth is the possibility of charge accounts and home delivery. Keeping the facility in good enough shape to suit one of the nation's most demanding health departments adds to the cost of doing business, too.

Finally, there is personal service. Fish will be cleaned and cut in front of you the way you want it, and at the same time you pick up some advice or a recipe. You may also be delivered a snub or a curt answer to an innocent question. "It's hard work," Robert Moore said. "We pay well, but there's a lot of hassle, too. People want assurance. They demand a lot.It can get you. Their attitude is hard for some of our young employes to accept. They can't stick with it."

Cooking fish is less difficult the fresher it is. "I stick to baked and broiled fish," said Robert Moore. "How you cook a fish depends on the shape or cut, not the name," said O. Williams. "I don't like to deal with bones, so I usually choose fillets. I bake them in a pan with some to keep them moist, then run them under the broiler to brown the top. In the summer, I may cook them on a grill, like steaks."

There is a simple cooking rule that came south from Canada. It states that you may cook any fish -- in any form, by any method -- by measuring it at the thickest point and allowing 10 minute per inch of cooking time. therefore, bake , poach or broil a sole fillet that measures 1/4-inch for exactly 2 1/2 minutes.

There is also a fine new basic book on cooking fish, "John Clancy's Fish Cookery." Published by Holt, Rinehart, Winston, it is available in paperback for $5.95. One way to bring down the cost of fresh fish is to serve small portions. A pound of meaty fillet can satisfy three or even four persons. Another is to buy the less-expensive fish. Croaker and spots, split and pan fried, can be delicious. There is an expanding market for squid and smelt. Sea trout and bluefish from nearby waters are apt to cost far less than red snapper or salmon from far away and should be fresher. More cooks are making fish soups with mussels or clams and leaving out the shrimp or lobster. Also, there are fish available that aren't on sale because of lack of demand: Among them, tilefish and hake (substitutes for cod or halibut), monkfish. All are readily available as are, O. Williams said, fresh frog's legs.

Here, is some immediate inspiration for fish cooks. Two of the following recipes are from great fish-cooking cuisines, Italian and Chinese. Two others are American, from a new publication of the National Marine Fisheries Service called "Seafood Adventures From the Gulf and South Atlantic." The final two are inspired by nouvelle cuisine and one of them takes the current practice of cooking fish for less time to the limit. The fish is served raw.

For that, you need really fresh fish. BAKED STRIPED BASS (4 servings) 3 pounds striped bass 1 large clove garlic, slivered 1 teaspoon oregano 1 tablespoon fresh chopped parsely or 1 teaspoon dry parsley salt and pepper to taste 1 tablespoon bread crumbs 1/4 cup olive oil Juice of 1 large lemon

Have fish cleaned and leave whole. Wash. Dry with absorbent paper. Make two slantwise slashes in fish 2 1/2-inches long and 1/2-inch deep. Insert garlic in slashes. Sprinkle fish with oregano, parsley, salt and pepper.

Line a shallow 7-by-11-inch baking dish with aluminum foil. Sprinkle with bread crumbs and half of the olive oil. Place striped bass in dish. Pour remainder of olive oil and lemon juice on top of fish. Bake in a preheated oven at 375 degrees for 35 minutes or until tender. Baste occasionally. --From "Italian Cooking Home Style" by Pauline N. Barrese FRIED SQUID (6 servings) 3 pounds whole squid, fresh or frozen 3 tablespoons lemon juice 1 1/2 teaspoon salt 1/8 teaspoon white pepper 2 eggs, beaten 3 tablespoons milk 1 1/2 cups all-purpose flour Cooking oil for frying Lemon wedges

Thaw squid if frozen. Clean squid according to procedure below. Cut mantle crosswise into 1/2-inch rings. Cut tentacles into 1-inch pieces. Sprinkle lemon juice, salt and pepper on squid. Combine egg and milk. Dip squid in egg mixture and roll in flour. Place squid in a single layer in hot oil, in a 10-inch skillet. Fry at a moderate heat, 350 degrees for 3 to 5 minutes. Turn carefully. Fry 3 to 5 minutes longer or until squid is lightly browned. Drain on absorbent paper. Serve with lemon wedges.

Procedure for squid rings: Thaw frozen squid. Cut through arms near the eyes. With thumb and forefinger squeeze out the inedible beak, which will be located near the cut. Reserve tentacles. Feel inside mantle for chitinous pen. Firmly grasp pen; remove from mantle. Under cold running water, peel off speckled membrane that covers the mantle. Wash mantle thoroughly and drain. Make rings by cutting across mantle. Tentacles can be chopped, minced or left whole. --From "Seafood Adveantures From the Gulf Stream and South Atlantic," National Marine Fisheries Service SUNSHINE BLUEFISH FILETS (6 servings) 2 pounds bluefish fillets or other fish fillet, fresh or frozen 3 tablespoons margarine or butter, melted 2 tablespoons orange juice 2 teaspoons grated orange rind 1 teaspoon salt 1/8 teaspoon nutmeg 1/8 teaspoon pepper

Thaw fish if frozen. Place in a single layer, skin side down, in a well-greased baking dish, 12-by-8-by-2-inches. Combine remaining ingredients and pour over fish. Bake in a moderate oven, 350 degrees, for 25 to 30 minutes or until fish flakes easily when tested with a fork. --From the National Marine Fisheries Service POACHED FISH WITH SHALLOTS AND VINEGAR (Serves 8 as appetizer 4 as a main course) 2 pounds fish fillets with skin left on (combine bass, salmon, red snapper, flounder or sea trout) 2 tablespoons minced shallots 6 tablespoons champagne or white wine vinegar 1 1/4 cups dry white wine 2 tablespoons butter, plus 8 tablespoons cold butter 1 tablespoon coarse salt 1 whole bay leaf 1 teaspoon dried thyme 1 cup julienned carrots 1 cup snow peas or green bean pieces or shelled fresh green peas 3 teaspoons chopped fresh coriander leaves (optional) 2 medium (3/4-pound) tomatoes peeled, seeded and chopped Salt Freshly ground pepper

Cut the fillets into 1-by 3-inch pieces. Season the fish with salt and pepper and set aside.

In a 1-quart saucepan, mix shallots, 4 tablespoons champagne vinegar and 1/4-cup dry white wine.Reduce over high heat until all the liquid has evaporated.Be sure shallots remain moist. Remove from heat and set aside.

In a skillet large enough to accommodate all the fish in a single layer, combine 2 tablespoons butter, coarse salt, 1/4 teaspoon pepper, bay leaf, thyme, 1 cup dry white wine, 2 cups water and remaining wine vinegar. Cook over medium heat until butter dissolves into the liquid.

Place the fish in the poaching liquid and cover pan.

Slowly bring liquid to a boil and immediately turn off heat under pan. The fish will continue to cook slowly while you finish the sauce and cook the vegetable garnish. Cover pan to keep fish hot and moist.

Bring 3 quarts water mixed with 1 tablespoon salt to a boil. Place carrots and snow peas in strainer and submerge strainer in boiling water. Cook for approximately 2 minutes, or until vegetables are barely tender. Drain and set aside.

While vegetables are poaching, slowly reheat shallot and vinegar mixture. When hot, finish sauce by whisking a cold butter, tablespoon by tablespoon. Take care not to overheat the sauce or it will separate. The color of the sauce should remain opaque at all times. Add coriander. Drain the fish and pat dry with paper towels.

Arange the fish like spokes of a wheel around the center of a warmed dinner plate. Make sure to alternate the various types of fish. Heap an assortment of vegetables in the center of the plate. Place fresh tomatoes on the top. Spoon sauce over fish. --From "Cooking The Nouvelle Cuisine in America," by Michele Urvater and David Liederman STEAMED FISH HUNAN STYLE (4 to 5 servings) 1 1/2 pounds whole sea bass, striped bass or sea trout 1 teaspoon salt 2 tablespoons fermented black beans, corsely chopped 1 teaspoon dried red pepper, diced 1 tablespoon Smithfield ham, cooked and chopped 1 tablespoon light soy sauce 1 tablespoon Chinese rice wine 1 tablespoon ginger root, chopped 1 stalk scallion, chopped 1/2 teaspoon salt 1 tablespoon peanut or vegetable oil

Clean and wash the fish; dry inside and out. Slash both sides of the fish diagonally at 1 1/2-inch intervals. Rub a little salt (1 teaspoon) inside and out and let it marinate for about 10 minutes. Put the whole fish into a shallow, heatproof dish or bowl. (If the fish is too long, cut it in half crosswise to steam. After steaming restore the fish to its original length and cover the opening with the sauce ingredients and some additional shredded scallions.)

Combine the black beans, diced red peppers, ham, soy sauce, wine, ginger, scallion, salt and oil. Pour sauce all over the fish. Refrigerate until ready to steam.

To cook. First boil the water. Place the shallow bowl with fish and sauce in the steamer and steam over highheat for 15 to 20 minutes. Transfer the fish to a long platter. Pour the sauce over the fish and serve hot.

Note: For those who do not like hot and spicy dishes, the dried red peppers can be omitted. Or the dish can be made somewhat milder by discarding the seeds when dicing the peppers. --From "Chinese Regional Cooking" by Lucille Liang MARINATED RAW FISH (4 servings) 6-ounce fillet of very fresh salmon 6-ounce fillet of very fresh striped bass 2 ounces dry salt cod 1 lemon 32 white peppercorns 32 coriander seeds 16 fresh tarragon leaves, coarsely chopped (see Note) 1 branch of parsley 1/2 cup imported virgin olive oil

Note: If fresh tarragon is unavailable, do not use dried. However, you might try substituting a tablespoon of capers. Their color and taste work nicely with the raw fish.

Have 4 well-chilled plates ready to receive the fish.

Using a long, sharp, flexible knife, slice the fillets on the diagonal, making the slices as wide and as thin as possible. Be certain that no skin, fatty film or other matter remains.

Lay the slices on the cold plates alternating their colors. Creates an undulating pattern pleasing to the eye.

When purchasing the salt cod, choose a small piece that is very, very dry. Grate it to a powder on a cheese grater and further refine it by passing the powder through a sieve. Sprinkle this salt powder evenly overly over the slices of fish.

I recommended that you taste the powder before using it. Depending on the cod, it may not be salty enough to achieve the desired effect and simply taste like plain powdered fish. In this case, it might be better just to substitute a little coarse salt, preferably sea salt.

Cover the entire surface of the fish with lemon juice, distributing it by tilting that plates back and forth.

Scatter 8 peppercorns and 8 coriander seeds over each plate and sprinkle with tarragon leaves. Create decorative divisions between the salmon and bass by slipping tiny srgs of parsley between the slices. Refrigerate the fish 15 minutes.

To serve: Hold each plate at a slight angle and let a few tablespoons of olive oil run slowly over the fish until the slices are coated entirely.

Serve the cold fish immediately, accompanied by large slices of bread. --From "The Nouvelle Cuisine of Jean and Pierre Troisgos."