A spellbinding and probably seminal achievement in the tradition of fantasy filmmaking, "The Dark Crystal" promises to expand the creative horizons of various expressive techniques -- puppetry, model making, miniaturized costume and scenic design, mime and enhanced electronic-hydraulic-manual motion control. All are utilized by Jim Henson, Frank Oz, Brian Froud and scores of other estimable decorative artists as decisively as "Snow White" rationalized full animation at the Disney studio.

Now at several area theaters (including a 70 mm engagement at the large auditorium of the freshly renovated, triplex Circle MacArthur), "Crystal" also emerges as a one-of-a-kind imaginative marvel within the specialized branches of movie illusion devoted to the depiction of fairy tales and fantastic myths.

Since Henson and his associates have been elaborating a richly fanciful and humorous, imaginative world of puppet critters for 25 years on television and, the last few years, in feature films, the quality of illusion in "The Dark Crystal" won't come as a total surprise. One is already accustomed to remarkably fluid manipulation of the puppet characters, sumptuous miniature settings and a sophisticated appreciation of the camera positions and tricks necessary to achieve proper spatial integration of puppets, sets and live actors.

Most of the crew assembled for "The Dark Crystal" had collaborated on the previous Muppet films or on "The Empire Strikes Back," where Oz made an invaluable contribution to George Lucas' science-fiction mythology by helping impersonate Yoda. The most popular creature in the new film is likely to be Oz' Aughura, a squat, buxom, gnarly-faced curmudgeon of a master astronomer who possesses three eye sockets but only a single, removable, keenly perceptive eyeball. She enables the elfin hero Jen to acquire a missing, prophecy-fulfulling shard from the huge, powerful crystal that controls the cosmology of their astonishing animistic world, a lost paradise suffering under the tyrannical ravages of a desiccated, vulturous priesthood known as the Skeksis.

Henson also recruited a coproducer, Gary Kurtz, and a production designer, Harry Lange, from "Empire," and his own movie reinforces the impression left by the first sight of Yoda -- here's the technology that was actually needed to realize a misbegotten project like Ralph Bakshi's pseudo-animated version of "Lord of the Rings." In addition, "The Dark Crystal" tends to confirm the already strong impression that the most expressive and innovative aspects of the Disney tradition are now in the hands of popular filmmaking visionaries like Henson, Lucas and Steven Spielberg.

This film achieves a pictorial grandeur that suggests loftier prospects for the puppet movie than I would ever have considered a practical possibility. The otherworldly setting has inspired Henson to attempt an almost completely artificial puppet environment: even the most sylvan, sun-dappled locations appear to be artful miniatures, and the human performers necessary for certain characters, like the stilt-legged Landstriders who act as fleet-footed, courageous mounts for Jen and the heroine Kira, another elfin foundling who reveals an aptitude for adventure rather more exalted than the hero's, are completely concealed by their costumes. As far as one can detect, the creatures who populate "The Dark Crystal" and interact so credibly are models of some kind, one and all.

Henson's obsession with this insatiable side of Creation has prevented his work from evolving in an utterly benign or innocuous way, despite the influence of characters like Kermit, Grover and Big Bird. "The Dark Crystal" is so far from being innocuous that I think it best to be leery about taking little kids, who might be extremely distressed by the uncompromising, nightmarish ugliness and savagery of the evil Skeksis. Older juveniles and grown-ups will be in a better position to relish the outrageous slapstick bravado of set pieces like the Skeksis' banquet sequence, where the hideous old birds of prey enjoy a lavish, appalling pig-out, embellished by Ben Burtt's inspired collection of sound effects representing Skeksis' slurps, burps and lip smacks.

Moreover, I think this kind of movie imposes itself more effectively on spectators old enough to be curious about the painstaking techniques and skills required to make it believable. I gather that the film was trimmed and redubbed with more intelligible character voices (especially to the ears of an American audience) after being sneaked into Washington some time ago.

If there was any slack in the original continuity, it seems to have been eliminated, perhaps a bit more ruthlessly than necessary in some respects. The fade-out in particular seems a bit rushed. The emotional gratification that naturally follows the successful completion of the quest by Jen and Kira and the resurrection of a favorite character presumed to have perished gets a rather abrupt sign off. At this point it wouldn't hurt to linger another 15 or 20 seconds to celebrate the restoration of life-affirming principles to a civilization threatened moments earlier with eternal decay.

Not too surprisingly, Jen and Kira are the softest and potentially weakest figures in the entire conception. Disney could never prevent his romantic juvenile characters, human or animal, from getting perilously coy, and Henson hasn't quite finessed this liability of the fairy-tale genres either. Nevertheless, Jen and Kira don't become repulsively coy, and it's apparent that if their wild, eccentric attributes (like Kira's astonishing and very useful moth wings) were emphasized a bit more, they might exist in a half-world of the human and nonhuman that worked like a charm.

Still, "The Dark Crystal" leaves no doubt that Jim Henson and his colleagues have reached a point where they can create and sustain a powerfully enchanting form of cinematic fantasy.