Faced with growing sales resistance to high-priced LPs, record companies now are turning to the shorter, lower-priced EPs to break new acts and boost old acts. Also known as mini-albums or mini-LPs, the "extended play" records feature three to seven songs on the standard 12-inch disc. This shorter format allows the companies to test new acts with less investment, while also allowing established acts to digress from their usual style without making the major statement of an album.

Dire Straits uses its new four-song EP, "Twisting by the Pool" (Warner Bros. 29800-0 A), to show its lighter, more playful side. Bandleader Mark Knopfler always has been a most elegant, expressive guitarist. After his first album, though, his lyrics developed a ponderous solemnity. That began to abate a bit with last year's witty cut, "Industrial Disease," and Knopfler breaks loose with this EP, which boasts the three funniest songs of his career.

Adopting Randy Newman's approach, Knopfler sings as characters rather than as himself. On the title song, Knopfler's character is a decadent young European who kills time at poolside with his Eurodisco tapes, indifferent to the world outside the club fence. With subtle irony, Knopfler celebrates this mindless life style with irresistibly contagious twist music. On "Badges, Posters, T-Shirts," Knopfler portrays a parasitic rock fan who hangs out backstage to grab free beers and T-shirts. With deadpan cool, Knopfler perfectly mimics the empty-headed opinions spouted by these hangers-on. The music--swinging, sophisticated jazz far over the head of this airhead character--is Knopfler's wordless commentary.

This EP also shows off a new ensemble spirit for Dire Straits. No longer do the songs serve Knopfler's guitar; now the guitar serves the songs. Thus there are fewer solos, but they mean much more. The EP also introduces the quintet's new drummer, Terry Williams (formerly of Rockpile), who gives the group more R & B punch than ever before.

The old industry practice of double live albums has been severely curtailed by the recession. Roxy Music may show the future approach with a live four-song EP, "The High Road" (Warner Bros./EG 23808-1 B). Recorded last year in Scotland, the current Roxy trio of singer Bryan Ferry, guitarist Phil Manzanera and saxophonist Andy Mackay was augmented by seven other musicians, including L.A. session drummers and Chic back-up singers. Unfortunately this gives everything a busy, overproduced feel, which only reinforces Ferry's glib, detached decadence.

Side 1 boasts two Ferry originals: "My Only Love" from the "Flesh and Blood" album and a new "Can't Let Go." Side 2 features Neil Young's "Like a Hurricane," a staple of the band's concerts, and John Lennon's "Jealous Guy," which was a No. 1 studio single in Britain for Roxy in 1981. "Can't Let Go" has a catchy chorus chant and all the strengths and weaknesses of Ferry's affected romanticism. The best songwriting is clearly on Side 2, though Ferry's vocals are not up to Young's emotional openness or Lennon's bittersweet ironies. The record's saving grace is Manzanera's brilliantly focused guitar fills and solos: the serrated edge on his solo for "My Only Love" captures the pain that Ferry gropes for but never touches.

Minneapolis' new wave quintet The Suburbs often have been compared to Roxy music for their similar stylizations, yet the Suburbs' ironies are tenser and their grasp of American soul is surer. After a long string of heralded releases on the local Twin Tone label, the Suburbs make their major label debut with a five-cut EP, "Dream Hog" (Mercury 811 303-1 M-1). Side 1 features four songs at 33 rpm, including "Waiting," which was a charted single for Twin Tone. Side 2 offers a longer, dance club mix of "Waiting" at 45 rpm.

"Waiting" describes the tense hunt for a lover among "the concrete and glass." Clipped guitars and sullen, simmering vocals create the sense of patience running out. On the dance mix, the throbbing bass and drum kick are boosted and battened by producer Steven Greenberg, the Minneapolis mastermind behind the disco hit "Funkytown." His funky dance beat underlines all five cuts, though, and saves the band from potential ponderousness and detachment. "Roll Over City," the record's highlight, bursts with self-sustaining energy even as it laments decaying cities and dead-end jobs.

RCA Records has announced it henceforth will introduce all new artists through EPs. Robert Ellis Orrall of Boston is the latest gifted American artist who's had to go to Britain in search of a break. His five-song EP, "Special Pain" (RCA MF1-8502), was produced in Wales' Rockfield Studios by Roger Bechirian, who has worked with Elvis Costello, Squeeze and Nick Lowe. Orrall uses the same traditional pub-rock approach to new wave as these artists.

Lowe's country-star wife, Carlene Carter, sings with Orrall on the EP's highlight, "I Couldn't Say No." Carter and Orrall play two lovers on the brink of breaking up; his lyrics have the realism of edited transcripts and his music shows the tug of war between two hearts. "Facts and Figures" is a disturbing, understated song about a cop harassing a rape victim. "Tell Me If It Hurts" punches up its catchy melodic hook with a synthesizer dance beat. Like Joe Jackson, Orrall sometimes strains too much in his lyrics but usually saves himself with his sure pop instincts.