There is something unattractively desperate about performers who not only come into the audience and sing into your face, but grab and stroke you as well. It's one thing to be moved by the power of artistry and quite another to be moved by some strange person's hand.

But this relatively minor flaw in the version of "Cabaret" now playing at d.c. space is important only in that it symbolizes the basic wrongheadedness of the production. The conceit of setting the John Kander-Fred Ebb musical in a cabaret like d.c. space is not without merit; unfortunately, director Dorothy Neumann has failed to exploit the idea imaginatively.

There are two islands of excellence: the three-piece band, which manages the music so well that a larger orchestra would seem superfluous, and the emcee character, played by Grover Gardner. He has the aroma of decadence that the part--indeed, the play--requires, as well as sinuous grace and a properly piercing voice.

He also managed to triumph over stage fright, something his colleagues could not manage. Their tense shoulders, pinched faces and self-conscious movements were at times painful to behold. Although Teman Treadway, Jewels Crowe and Richard Pelzman seem to have good voices, they have not learned how to deliver a song simply, and their director has not helped them to discover business that would display the work to best advantage.

As the legendary Sally Bowles, Christopher Isherwood's original and remarkable character, Megan Morgan is simply unsuitable. Sally Bowles, in her incarnations in his stories, in John Van Druten's "I Am a Camera" and in "Cabaret" is the archetype of the woman who not only burns the candle at both ends but tries to light the melted wax as well. Morgan, for all her evident sincerity in the role, looks more like a healthy, wholesome Dairy Queen.

This is one of the rare shows in which the women's costumes actually detract from the performance. They seem to be made of bits of underwear--a slip, a strapless bra, half an old crinoline--unflatteringly tossed and pinned together without any discernable design. The choreography by Jack Guidone is of the pelvic thrust variety, but it doesn't look as if he had much dancing ability to work with.

"Cabaret," book by Joe Masteroff, music by John Kander, lyrics by Fred Ebb, produced and directed by Dorothy Neuman, musical direction by Marcia Kravis, lighting by Gary Floyd, dance consultant, Jack Guidone. With Megan Morgan, Teman Treadway, Jewels Crowe, Grover Gardner, Richard Pelzman, Helen Stoltzfus, Kim Langford, Tom Simpson, Barbara Jones, Chuck Spicka and Bruce Robinson.

At d.c. space through July.