Forget about the old American Dream: a home in the suburbs, big green lawn, two kids, two cars, two mortgages. Ken and Sandy Daggett are living a new American Dream.

They have one mortage, one pickup truck, 11 cats and dogs and a home in the city -- a three-story graystone Gothic mansion with stained-glass windows and turrett. In 1973, they picked it up for $22,500 because it stands within a Molotov cocktail's in Chicago's Wicker Park.

But they dreamed of the house restored to the grandeur of 1889, when it was built for $3,500 by one Harlow P. Smith, a real-estate speculator.

Now that Dream -- with a capital D -- is happening, and here's the American part: It is happening for free.

The tab for renovation and restoration of the home -- at least $150,000 -- was picked up by "The American Dream," a new television series about a fictional suburban family that moves bck to the city. In return, the home, after renovation, will be used for the filming of six series episodes this fall.

"I've heard of good luck, but this is extroardinary," says Sandy, who is the bookkeeper and general assistant for her husband's graphic arts business, Graviti Studios Inc. "This is my kind of show."

Things haven't always been so rosy. When they moved in seven years ago, "It was a step up," she says, from their previous residence in Uptown. That first summer, 12 buildings burned down within blocks.

Welcome to the neighborhood.

For the first four months, the Daggetts, a dog and two cats lived in the basement. Everything else was a shambles: Plaster falling all over, a hole "the shape of Illinois" in the master bedroom ceiling, exposed wires. But they loved it. "It's a benevolent house, not spooky at all," Sandy says. "When I first saw it, I had a funny feeling about it. It had some sort of destiney." f

That destiny began unfolding last year. Scouts for the film, "The Blues Brothers" came sniffing around for a location of the orphanage in the movie. The Daggetts were approached, "but the scouts assumed the house looked as good inside as out." They were very disappointed. The Daggetts, spending their own money, had managed only to refurbish the first floor. "We gutted it and used 12 tons of plaster." "The Blues Brothers" moved on. "

But the location stayed on file. Then came "The American Dream," about a family of five, plus grandfather, who move from suburb to city.

"It's actually the reverse of the American Dream," says art director Bill Fosser, who scouted locations for the series. "It's great because it opens up a lot of different stories, instead of a family moving to the subburs."

Fosser visited two other homes before he got to the Daggetts'. The kitchen, big and bright, clinched it, he says. The staircase -- a stately artifact with ornate newal posts at the base -- was a bonus.

Last spring a two-hour pilot was filmed in the home, but that required only minir renovation. (For the month of filming, the Daggetts lived in the master bedroom on the second floor.) The network, ABC, liked the pilot and commissioned six more episodes. At first, Fosser and company planned to build sets of the home in Hollywood. But then production executives changed their minds. Why?

"Chicago, strangely enough, looks like Chicago," Fosser explains. "If we needed a scene on the lakefront, or on the 'L,' or in a park, we'd have nowhere to go." There were other considerations: "Most of the scenes were going to be shot in the fall and winter, and I don't recall any falling leaves or snow in L.A."

The Daggetts, meanwhile, were about to apply for a $75,000 renovation loan when Fosser called. They could not refuse, even though it would mean moving a household of furniture and their cats and dogs. ("We're pushovers, and people know it. They leave animals on the porch or tied to clotheslines. We've given away 12.")

They moved in three days. "I hate moving," Sandy says. "But it's a small price to pay for what we're getting, which is a house that is exactly as it should be." They piled some of the furniture into a four-car garage, the rest of it in a six-room apartment the production company rented for them about half a block away. They wanted to stay close because, "We like to see what's going on," Sandy says. "Things change so fast."

The renovation crew -- carpenters, paper hangers, painters and plasterers -- descended on the place six weeks ago. They worked 18-hour days, ripping out walls, installing hardwood mouldings around doors and windows, on the ceilings and wainscotting on the walls.

"We wanted to get a feeling for the old house," says Fosser, mastermind of the renovation. As part of the agreement, Fosser promised to collaborate with the Daggetts on everything; nothing would be done without their approval. So far, there have been no disagreements.

The kitchen, which had been stuccoed within an inch of its life, was stripped and remodeled. A new arch greets visitors to the living-room. Doors have come and gone. There's a new oak fireplace. Every detail has been attended to, down to the wood plinths -- carved ornamental blocks -- above and below each door and window, 172 in all.

The Daggetts are impressed. "We thought it would be a lot of superficiality and theatrical tricks," Sandy says. "When they came with real wood and plaster, I almost fainted. We've dreamed of doing wonderful things, but they're doing things we never even considered because the price is so outrageous. It would have taken us the rest of our lives to get the woodwork back to what it was." (For the record, there will be a few theatrical tricks. Several fake walls, called "wild walls," will be erected, particularly in the living room to hide the turret. The Daggett house is the interior for the series, but a turretless house on Roscoe Street is the exterior because "it looks more like the inner city, it's close to the 'L,' and there is more traffic around it.")

The renovation has caused only a small stir in the neighborhood. Still, on the front gate is a sign: Not Open to the Public. To emphasize this point, a malamute lies on the porch, skeptically surveying strangers. But the dog is friendly: His name is Mouche, after Scaramouche. He is 8, and arthritic. He gets his exercise running up and down the steps chasing a shite ball. He also gets fed T-bones by the night watchman and Twinkies by the workmen there during the day.

The series, scheduled to start shooting Aug. 11, has been delayed by the actors' strike. The crews packed up last week, and will return later to apply finishing touches. With luck, the shooting should end by Christmas. Six more episodes may be shot at the Daggetts', but it's unlikely because the actors prefer Los Angeles. The home has been measured and photographed, and if the series goes beyond the first six, sets will be built in L.A.

As for the house, the Daggetts plan to wrap up the renovation with a new roof, an enlarged bathroom and a few other necessities. Only one other detail remains: income taxes on the value of the renovation. The Daggetts maintain that the production company rented their home, and like any tenant, has a right to improve the premises. No word yet from the IRS.

But it doesn't matter: The Daggetts have their dream house, and that is enough. "We're never going to move," Sandy says. "We love the neighborhood. We could have sold a lot of times, but people know us here. Neighbors look out for each other, and that makes all the difference in the world. To me, it's like any place else in Chicago, just more so."

To many, that is the real American Dream.