She used to be in pictures, this "Second Hand Rose" with the secondhand clothes. But Saturday night the vision in the feathered hat, pantaloons and yellow boots was First Lady Nancy Reagan, making a surprise on-stage appearance that brought down the house at the Gridiron Club's 97th dinner and political roast.

Belting it out for a high-powered, white-tie crowd of 600, the first lady poked fun at herself and her expensive tastes in designer clothes, then for an exit line dropped a plate done up to look like a piece of her new $200,000 White House china.

Probably nobody was more surprised to see her take over the spotlight in the Capital Hilton Hotel ballroom than her husband. Later, President Reagan told the crowd he had come to the dinner "a happy husband" and would leave as "a stage-door Johnny." At the end, he asked jokingly if he could take his wife home to show her his collection of political cartoons.

Written, produced and performed by a committee of Gridiron members, a select group limited to 60 newspaper correspondents, the show traditionally lampoons Washington officialdom with the self-imposed proviso that the "gridiron may singe but . . . never burns."

This year's Gridiron not only didn't singe Mrs. Reagan, but gave her an opportunity to embellish her reputation. The sophisticated audience of journalists, politicians and their friends responded to her performance as though she had undergone a major change. A number of these image-makers left the ballroom saying that Nancy Reagan's song-and-dance number had transformed her image.

Saturday night's version singed the Democrats as poor little political lambs bemoaning how "the magic of big spending" and "the joy of being taxed" had lost appeal. The Reagan style of domestic, foreign and personal politics came in for its share of satirical singeing, too. A reporter impersonating presidential counselor Edwin Meese sang, "We'll Get Him to the War on Time," a reference to the Reagan staff's decision last summer not to awaken the president to inform him that two Libyan fighter jets had been shot down by two U.S. Navy jets.

Mrs. Reagan's big number came halfway into the show, after a song chiding her about her clotheshorse image, sung to the tune of "Second Hand Rose." The words, in part, were:

"Secondhand clothes/ I give my secondhand clothes/ To mu-seum collections and traveling shows . . . I never wear a frock more than just once/ Calvin Klein, Adolfo, Ralph Lauren and Bill Blass/ Ronald Reagan's Mama's going strictly first class/ Rodeo Drive, I'll be back, Rodeo Drive/ In 1985."

A few minutes later, in a get-up that included a feathered boa, an aqua skirt with red and yellow flowers held together by safety pins and the floppy feathered hat her staff gave her on her birthday as a joke last summer, the first lady peeked out through a rack of clothes and demanded of bandleader Les Karr: "Let me see that score!"

When the audience realized who she was, she got her first standing ovation of the evening. Prancing around the stage, she sang in a throaty voice her own version of "Second Hand Clothes," written by White House speech writer Landon Parvin and the first lady's press secretary, Sheila Tate. It went:

"Secondhand clothes, I'm wearing secondhand clothes

"They're all the thing in the spring fashion shows;

"Even my new trench coat with fur collar

"Ronnie bought for 10 cents on the dollar

"The china is the only thing that's new.

"Even though they tell me that I'm no longer queen

"Did Ronnie have to buy me that new sewing machine?

"Secondhand clothes, secondhand clothes

"I sure hope Ed Meese sews."

She rewarded her second standing ovation with an encore. Then she dropped the plate, and it shattered.

Mrs. Reagan had slipped away unnoticed from the head table where the president sat with Gridiron officers, Vice President Bush and Barbara Bush, Soviet Ambassador Anatoliy Dobrynin, nine other ambassadors, four Supreme Court justices, including Sandra O'Connor, and most of the Cabinet.

"The president thought she was going to the ladies room," an aide to the first lady said later.

Followed by a single Secret Service agent, Mrs. Reagan made her way backstage where White House Social Secretary Muffie Brandon and Tate were waiting with a change of costume. She had rehearsed at the hotel Friday morning and before that went through her routine Thursday afternoon in the White House Library while Frank Sinatra and Perry Como were rehearsing upstairs in the East Room for that night's state dinner.

Delivering the Gridiron's traditional "speech in the dark," club president Benjamin R. Cole, Washington correspondent of the Indianapolis Star and the Arizona Republic, said: "The president says, give his economic plan a chance to work. The Democrats says, hell, it's already worked. Nonetheless, prosperity is just around the corner. You can hear it trickling down."

But until Mrs. Reagan stole the show with her unannounced solo, the loudest laughter of the evening had been for Rep. Morris K. Udall (D-Ariz.), delivering the speech for the out-of-power Democrats.

Udall said he and Sen. Barry Goldwater, the Republican speaker, had made Arizona "the only one of the 50 states where mothers don't tell little children they can grow up to be president." Remarking ruefully on his 15 straight defeats by Jimmy Carter, the Arizona Democrat asked, "How would you like to have that on your record?"

Some other Udallisms:

Interior Secretary James Watt and EPA Administrator Anne M. Gorsuch "have done for the environment what Bonnie and Clyde did for banks";

The Reagan administration's efforts to require notification of parents whose children use birth control devices could be called "the war on puberty";

The difference between the Supreme Court and the Ku Klux Klan is that "one puts on black robes and scares the hell out of white people, while the other puts on white robes to scare the hell out of blacks."

Mrs. Reagan's performance was the third by a first lady in what seems to be becoming a new Gridiron tradition. Betty Ford started it in 1975 when she and Happy Rockefeller, the first presidential and vice presidential wives invited as guests, participated in ceremonies initiating the club's first woman member, United Press International's White House correspondent Helen Thomas. (This year's five new members included no women.)

In 1978, Rosalynn and Jimmy Carter jitterbugged their way on stage to become the first First Couple to perform at a Gridiron dinner.

Among those for whom Mrs. Reagan's self-deprecating song-and-dance routine cast her in a new light was Virginia Gov. Charles Robb. He called her performance "one of the most astute moves I've seen in a long time." Maine Gov. Joseph E. Brennan also thought the first lady had "helped herself nicely," but added that such a rare view of her did not change her husband's policies. "There are still 10 million unemployed," said Brennan, "and there is still the interest rate."

President Reagan ended the evening by singling out his press secretary, James Brady, waving from his wheelchair.

"To laughter and to liberty," said the president, proposing a toast, "may America's supply of both never be scarce."