THE DRAGONS HAD long since slithered from the moat, and ivy choked the crumbling castle walls. For former inhabitants of the medieval structure in County Kerry, Ireland, rested peacefully beneath moss-covered tombstones and buttercups sprouted in the once-dank dungeon.

Yet, when exploring this ruined castle on a recent trip to Ireland, my husband and I and our two friends had no difficulty imagining it alive with the revlry of great feasts and the echoing footsteps of pampered nobility who probably graced its halls in an earlier age. f

For Ireland is a magical land that lends itself to dreams. In the countryside you can almost see the leprechauns dancing beside the preaceful thatched-roof cottages where peat-smoke curls lazily from the chimney and fills the air with rich, earthy smells.

On the wild western shore it's easy to become enchanted by the untamed magnificence of sheer stone cliffs rising hundreds of feet above the rough and forbidding waters.

Throughout the Emerald Isle are thousands of antiquities -- from castles like the one we "discovered" to Druid burial mounds at Newgrange older than Egypt's pyramids -- that provide fine fodder for fantasy as well as a photographer's paradise.

One of the main reasons my husband and I chose Ireland for our two-week vacation was to visit our friends Kevin and Beverly Ward, natives of Washington State who moved to Dublin two years ago so Kevin could attend the Royal College of Surgeons.

Their flat in Monkstown -- one of the nicer suburbs of Dublin -- has the characteristic Georgian door, brightly-colored with a fan-shaped transom. It was much nicer, they asured us, than their first flat where they had been victims of a pre-dawn raid by police who suspected the former occupants of belonging to an anti-government group.

The Wards (whose name is as common there as Smith is here) had adjusted to their tiny refrigerator, peat-burning fireplaces and lack of a shower -- bathtubs are the norm in Ireland. But their toughest physical adjustment was the two separate taps for hot and cold water (nowhere did we see any sink or tub with a single tap). They'd purchased a rubber gizmo to place over the faucets to allow an adjustable warm flow.

They'd also seemed to master the language. Although they still spoke with what one Irish friend called "a John Wayne accent" rather than a musical brogue, they "rang" people on the phone -- to call means visit -- and knew "a good crack" (a fun time). As secretary to a solicitor, Beverly learned to spell in Irish English -- labour, centre, harbour. They purchased "mince" (hamburger meat) at the market, went for a "jar" (a glass or drink) at the pub and stopped using "American" phrases such as o.k. which have no meaning in Ireland.

We spent our first week in Dublin while Kevin finished exams, shopping for tweeds and hand-knit sweaters, making day trips in their right-hand drive "McFiat," playing tennis (practically a national sport) on public courts and getting acquainted with the local pubs.

One of our nicest evening trips was to the Curragh racetrack where we got caught up in the Irish love of sport and betting. Despite the light drizzle -- an everpresent misty condition referred to as "soft weather" -- the Curragh was jammed with excited spectators. There appeared to be no age limit on betting as children who looked no older than 7 crowded over their "race cards" and bellied up to the 50 pence ($1) window.

Between pints of Guinness we discovered a faultless system. By counting the words describing each pony as listed in the "Turform Race Rating" we purchased for one pound ($2) at the gate and betting on the horses with the longest description, we won every time.

Other Dublin-based highlights included an evening at the Abbey Theatre, which produces classic and new Irish plays, and a visit to Kilmainham jail. Onced used for political prisoners and now a museum, the jail bore testament to the fact, said our tour guide, that "England was responsible for all Ireland's political ills 80 years ago as it is still today" -- a sentiment many of his Irish brothers seems to share.

During our second week we drove through the spectacularly scenic and precariously adventuresome roads of the southern and western countryside. Aside from a short stretch of "dual carriageway" -- Ireland's two-lane version of a super highway -- most roads are narrow, winding and rimmed by stone walls.

It's not unusual to stop and wait for a herd of cows and their bicycle-peddling cowherd to cross the road. Woolly sheep who jump surefootedly along precipitous cliffs seem to enjoy leaping just as agiley in front of cars, forcing the driver to be extremely alert or else acquire a taste for lamb chops. Most terrigying were the huge trucks that careened at a break-neck pace through narrow city streets. Most tiresome were the ancient, unpassable farm machines that inched along country roads.

It was a particular challenge to figure out which road to take, since signs are small or nonexistent. On one instace we noted a sign marked 10 miles to our destination. A few miles down the same road, another sign noted 12 miles to the same destination.

And we learned early on not to ask directions. Although the people are friendly and will go out of their way to help you, they are so eager to please that they're likely to tell you just what you want to hear -- "it's a 15-minute drive" -- rather than the harsh reality that it may take all day.

Charming bed-and-breakfast guesthouses abound. The typical price is 5 pounds ($10) per person per night, and the hearty breakfast menu is always the same: a tiny glass of juice, choice of corn flakes or porridge, brown bread, egg, sausage, bacon, baked tomato and coffee or tea.

At our favorite, the Eden Villa farmhouse in Killarney, our hostess placed a hot water bottle in the bed at about 8 p.m. so the crisp sheets were toasty by bedtime. Like other accommodation owners we talked to, she said money was tight and tourism was "not as good as some years, but good just the same."

By contrast, hotel rates in Dublin are much more expensive and can be purchased with or without breakfast. Some sample rates for the high season (April 1 to Oct. 30): $59 for a double room with bath and breakfast at Wynn's Hotel on Lower Abbey Street, $84 for a double room with bath at the Royal Hibernian Hotel on Dawson Stree., and $96 for a double room with bath at the Shelbourne Hotel on St. Stephen's Green.

Gas (call it petrol) cost about $3.25 per gallon, and we had no problem finding it. Had we needed to rent a car, agencies abound. Their highest "tourist season rates" in July and August are about $200 per week or $30 per day with unlimited mileage -- you buy the gas. Off-season rates run about $23 per day.

Among the must-sees of the Irish countryside:

Waterford -- offers a tour through the crystal factory where glass is still blown and cut by hand.

Blarney Castle -- where you must practically hang upside down by your toenails to kiss the lengendary Blarney stone and win the gift of gab.

County Kerry -- drive along the spectacular Ring-of-Kerry, the wild Dingle peninsula and the staggering mountain passes of McGillicudy's Reeks. Stop on the beach at Inch -- the hauntingly beautiful town where "Ryan's Daughter" was filmed.

Cliffs of Moher -- the single most breataking spot we saw in Ireland, in County Clare, where 700-foot cliffs rise above the Atlantic Ocean.

Although Ireland isn't known for it's cuisine (we ate a lot of fish and chicken and chips, chips, chips), on our last evening in Dublin we had a fabulous dining experience at the award-winning Restaurant Mirabeau.

Proprietor Sean Kinsella greeted us at the door, ushered us into a cozy dining room and presneted us with a complimantary bottle of wine. Then the waiters began a parade of food -- first showing off the live four-pound lobster, then the night's choice beef, plump duck, king prawns and fist-sized scallops. The food tasted as good as it looked, and the meal cost $120 for four.

The evening proved a fitting end to a magical trip. As we experienced the warm hospitality and fine foods, we could imagine the inhabitants of our castle enjoying a similar meal long ago, back when dragons ruled the moats and leprechaun's hoarded their crocks of gold.

(For free information about Ireland write the Irish Tourist Board, 590 Fifth Avenue, New York, NY 10036.)