Stephen Donaldson looks like an English instructor waiting for tenure at a Midwestern university, and that's what he might have been. But he gave it up to live in a never-never land where strange monsters, evil spirits and people with supernatural powers are locked in an unending battle between good and evil.

That is the world of Donaldson's epic fantasy -- published, so far, in more than 2 million copies -- with an improbable hero named Thomas Covenant, a contemporary American leper who has magic powers.

At 33, with his first trilogy established as a genre classic and a fourth volume already number nine on Time magazine's list of national best sellers, Donaldson is the hottest fantasy writer since J. R. R. Tolkien and one of the few who have managed to break out of the Tolkien mode. His sales figures don't begin to approach those of Tolkien, who has sold more than 25 million copies in paperback. But Donaldson has earned over $200,000 in the last few years and has helped to build a new market for fantasy fiction.

"I'm very lucky," he says. He is also very methodical and persistent -- the kind of person who can write and rewrite 2,400 typed pages of fiction with no prospect of a publisher and absorb 47 rejections in 3 1/2 years before hitting pay dirt with his 48th submission. Pages of Prophecy

After going through American fiction publishers in alphabetical order without finding one to issue his enormous saga, Donaldson was ready to begin making the rounds of British publishers. But first, he decided to have a second try with Ballantine, because they had published Tolkien and were the logical ones to publish him. It worked.

But his marriage didn't. Donaldson's former wife, Lynn, had supported him financially during the years he was working on the trilogy, and even drew the map of an imaginary country that is bound into each of the Covenant novels. But after all the hardship, the couple broke up as soon as he was successful. Asked about the parallel with his fictional hero (Covenant is also divorced -- an unusual status for fantasy heroes), Donaldson says that Convenant was divorced long before he was: "That wasn't autobiographical, but maybe it was prophetic."

Before his divorce, Donaldson had moved to Albuquerque, N.M., where his wife's parents lived, from Ohio, where he had been born in 1947, gone to college and written his first trilogy. Now, pending a new marriage in September to the head of the fantasy department in an Albuquerque bookstore, he lives alone with a hi-fi system that is an essential part of his working equipment.

"I write to music," he says. "I build a cocoon of sound and work inside it. Usually, I start off quietly -- perhaps with a Bach partita for unaccompanied violin, then I build up gradually to something like a Brahms symphony. But when things get heavy, when the characters begin fighting and yelling at one another, I break out the Wagner, probably 'Goetterdaemmerung.'"

He thinks of his writing as operatic: lush, lavish and larger than life."My characters don't have conversations, they shout at one another," he says. Laws of 'The Land'

Indeed, the problems readers may be trying to escape in Donaldson's fiction go lurching right along with them through the book -- at least in symbolic forms. An idyllic society ("The Land") is struggling against pure evil in the person of Lord Foul, a being of awesome supernatural powers, who has strange and potent allies, animal, human and immaterial, at his command. The odds are stacked in favor of evil.

In the middle strands Thomas Covenant, leper and skeptic, a well-intentioned, contemporary, middle-class American who doesn't trust or understand the strange powers ("wild magic") he has been given in The Land. Shortly after his first arrival the benign influences of his environment give him a remission in his leprosy.(Donaldson lived in India from the age of 4 to 16, and he knew lepers personally. His father was a medical missionary, an orthopedic surgeon at a leprosarium; his mother was an occupational therapist.)

One of the first things Covenant does in the middle of his new-found euphoria is to commit an act of rape, which will have profound dynastic implications in later episodes.

The violence and social upheaval in the novels may reflect the turmoil amid which they were born.Donaldson was a graduate student at Kent State University ("a pseudo-Conrad scholar," he says) when he began the long job of constructing the trilogy. That was in December 1969, months before the campus protests against the Vietnam war escalated into a massacre. The Covenant story kept growing through those events and the tense aftermath, when Donaldson remembers "helicopters buzzing over the dormitories, sort of challenging us to come out."

Donaldson was not physically present at the shooting -- as a conscientious objector, he was doing alternate service at a hospital in Akron -- but he worked at Kent State as a teaching fellow for a long time afterward.

"I don't consciously draw on my life for my writing," he says, "but I think my sense of life in America and the dynamics of American society was seriously affected by that experience. It did seem that life at Kent never got away from the shooting for the next year and a half." The Del Rey Duo

Getting Donaldson's epic published was nearly as great a gamble as getting it written.

The first time around, Ballantine had returned his 600-page manuscript without even bothering to enclose a rejection slip. But, Donaldson says. "I figured that the publishers of Tolkien should have some money available to publish fantasy. I didn't know, when I sent it in the second time, that Lester and Judy-Lynn had come to power."

Lester and Judy-Lynn are the Del Reys, a husband-and-wife team who had begun a new project at Ballantine -- a line of fantasy and science-fiction books published under their own name, which is one of the most prestigious in the field. In 1976, when Donaldson's manuscript reached Lester del Rey, the couple was already working on a project which Lester sums up succinctly: "We wanted to get fantasy off the category shelves."

They were about to launch a major push that, as it turned out, made 1977 The Year of the Fantasy. One key element in the strategy was the last big Tolkien book, "The Silmarillion." It would not become a chronic best seller like "Lord of the Rings," they knew, but it would call fantasy to the attention of the public. And it would strengthen the hardcover line that the Del Reys were adding to Ballantine's basically mass paperback operation.

A second part of the strategy was "The Sword of Shannara" by Terry Brock, a Tolkien look-alike that the Del Reys decided to issue simultaneously as a hardcover and trade paperback -- again bypassing the usual Ballantine format. The strategy worked: "Shannara" made the trade-paperback bestseller lists, which had not normally been hospitable to fiction and never to fantasy, and movie rights to it were sold.

Nobody seems to know exactly what share fantasy fiction has in the $2.5 billion Americans spent last year in general bookstores. But the general impression is that sales are going up. The nationwide B. Dalton chain will not give hard figures on its sales but Jeff Hohman, senior buyer in its mass-market paperback department, reports that fantasy fiction now accounts for four percent of the chain's mass-market sales. "In 1970, there was only one major fantasy author -- Tolkien," he says, "but the audience began to grow in the late '70s and is still growing. It has become an important category."

At Locus Magazine in San Francisco, a trade publisher for authors and hardcore fans of fantasy and science fiction, editor Charles Brown says that the sales trend in both fields is "up, up, up," with fantasy selling about 10 percent more than science fiction. "More than 1,300 titles were published in the field last year, about 15 percent of the total titles published and up from 12 percent a few years ago. Mysteries used to sell a lot more than fantasy and science fiction; now, they sell a lot less."

Brown confirms that fantasy has been booming in the last few years, probably because of the Tolkien influence, with four paperback houses besides Ballantine (Dell, Bantam, Berkley and Pocket Books) offering recognizable lines of fantasy that are clearly labeled as such. "Nobody will give a gross figure on how sales are going," he says, "but they're good. It's a funny field. The bread and butter of it is not in big, spectacular books but average, everyday books that make a dependable profit. A lot of people buy the field, not a particular title." Fantasy by the Pound

The Covenant trilogy came in "over the transom" (that is, unsolicited) at the right moment to become a part of this effort. The work arrived in three boxes. Lester del Rey looked through it, asked for the other two volumes and was deluged with more boxes. The rewriting was as epic as the manuscript: Del Rey is one of the dying breed of editors who actually work on a manuscript, and he says that he and Donaldson will have "some lovely fights by mail. He will send me a nine-page letter telling me why I'm wrong and I'll send him an 18-page letter telling him why I'm right."

Donaldson says that Del Rey "can look through a manuscript of mine and point out the passages based on research -- they're the dull parts. He'll say, 'you did research here and here and here, didn't you?" and when I admit that I did he'll tell me, 'don't look it up -- make it up.'"

While fighting the author with one hand, the Del Reys looked for a hardcover publisher with another. They managed to persuade Holt, Rinehart and Winston to issue three volumes of fantasy by an unknown writer in a hardcover set costing $30 -- a breathtaking gamble -- and rushed production. They had the 1,100 pages of the first Thomas Covenant trilogy out in print by October of 1977, bringing The Year of the Fantasy to a suitable climax.

There were some nervous moments before it became clear that it would all work. Lester del Rey remembers one conversation in an elevator with a worried Ballantine executive who had glanced at the Covenant books and wondered why he was publishing them. "Lester, what are you doing to us?" asked the executive. "I know the field and you don't, answered Del Rey. "Trust me."

Now, Ballantine is launched on the second Thomas Covenant trilogy, has nearly persuaded th author to write a third and hopes for a fourth. Donaldson is not quite so sure. Between the first and second Covenant trilogies, he wrote a detective story, which Ballantine will publish under a pseudonym to keep the Donaldson image unblurred. "I do not want to limit myself to Covenant," he says, "but the kind of tensions I have developed between Covenant and Lord Foul and the Land are very fertile for me. Lester has this grand 12-book scheme in mind. So far it's still more his than mine -- I can't write to order. I want to do a third trilogy, but right now I'm just promising myself to finish the second one." The Leper as Antihero

The struggle between good and evil has always been the basic ingredient of fantasy fiction -- but if Lord Foul is pure evil, Thomas Covenant is hardly pure good. He tends to be misanthropic, a natural feeling for a leper whose wife had left him and whose neighbors would rather be somebody else's neighbors. But, even worse, he's not quite sure what to think of his heroic role. He gives himself the title "The Unbeliever," because he doesn't quite believe that these adventures are happening to him in a land of giants, dwarfs, strange animals, sorcerers and evil spirits, or that the obsolete whitegold wedding ring on his three-fingered hand really is a key to wild magic that he never understand and only fifully controls.

The fact that Covenant doesn't quite believe in himself and that he is not a hero born and bred may be helping him to find a readership among Americans, who are also, perhaps, a bit dubious about their taste in fantasy. At any rate, he is probably the only possible kind of fantasy hero for Donaldson who says that "my three favorite writers are Faulkner, Conrad and Henry James. When I'm writing, I have to cut down on my Faulkner reading, otherwise it creeps into my own work." Donaldson says that he writes primarily "for me," and can't see himself writing "straight" fiction, but adds that he "would never try to rewrite Tolkien.

"I have a very rich fantasy life of my own, of course," he says, "but while I'm dreaming, I'm always aware of the bed."