The difference between a good electric guitar and a great one is its sound. Sure, one may have a flashier paint job, a sexier shape or shinier hardware, but the bottom line will always be what you hear once you've plugged it into an amp and begun to play. Trouble is, most great guitars have a single signature sound -- the clean, treble bite of the Fender Stratocaster, for example, or the sweet, fat roar of the Gibson Les Paul -- which means that guitarists hoping for a wider sonic palette have to resort to switching instruments to get the sounds they want.

Unless they are lucky enough to own the new guitars made by Paul Reed Smith.

"Most guitars have basically the same character to their sound overall," Smith explains. "With this guitar, the actual character of the sound changes. It's almost as if you'd plugged another guitar in."

Rather than leave his audience in doubt, Smith gives a quick demonstration. He tosses off a blues lick with the honeylike highs of one of Eric Clapton's Stratocasters. He flicks the rotary switch over two notches, and suddenly the guitar takes on the muscular growl of Eddie Van Halen's instruments. He flips a switch and the sound softens to the mellow tones associated with Chet Atkins. Already, Smith's guitar has done the work of three different instruments, and he's not even halfway through the demonstration.

If this seems incredible, it is -- but it's also typical of Smith's work. From his cramped attic office just a short walk from the State House in Annapolis, Smith, 28, has been building a strong custom-guitar business for eight years. His instruments, handmade from Honduran mahogany and Brazilian rosewood, have earned him a reputation as a painstaking craftsman and inspired luthier, and his client list reads like a rock guitar Who's Who: Carlos Santana, Al DiMeola, Neal Schon and Heart's Nancy Wilson are but a few who know that Paul Reed Smith builds great guitars.

Great wasn't good enough, though, because Smith wanted to make the ultimate guitar, an instrument every player would love. "People take in an instrument the same way they take in music," he says. "The important questions are how does it feel? how does it sound? how does it look?"

The first consideration, naturally, was the sound. "We spent 6 1/2 years getting the acoustic sound of the instrument right where we wanted it," he says. "It's got a brightness to it, warmth and no clanginess. But, obviously, the next step was to do the pickups."

Pickups are the source of an electric guitar's amplified sound, and their design and composition determine the character of that sound. Not all pickups are created equal, however, and trying to capture the sound of a classic model such as the 1959 Gibson P.A.F. Humbucker has turned into a minor industry, especially with the genuine '59 P.A.F. pickups going for $100 apiece.

Smith pursued this electric El Dorado along with everyone else, but, unlike the others, he actually found it. "We broke the code," he says of the process by which he and partner Eric Pritchard unraveled the secrets of the P.A.F. "We found out in mathematical terms what makes a pickup have character. It's all math."

Once the code had been broken, Smith began to work variations on the cipher, and soon had an array of classic electric guitar sounds at his disposal. But he didn't stop there. Noting that most electric-guitar players can be divided into two camps, Fender fans and Gibson enthusiasts, he worked out a body design for his instrument that combined the best of both. He refined his tremolo system to make it smoother and surer. Best of all, he added a locking tuning peg designed by Pritchard that makes string changing a breeze and string slippage a thing of the past.

In fact, the only thing wrong with Smith's guitar is that you can't buy one -- not yet, anyway. After failing to negotiate an acceptable manufacturing partnership with Kramer Guitars, Smith decided to do it himself, and has opened his own factory. With orders from across the country and a list price that puts his instrument head to head with Stratocasters and Les Pauls, Smith's first guitars roll off the assembly line this spring.

If the reaction of the music stores is any indication, Smith's new guitar plant will hardly have an idle moment. "They couldn't wait to get their hands on them," he says of the salespeople he visited. Why? Smith pauses for a second, then explains. "Some guitars will help you," he says. "Like when you stretch a note -- some guitars will die on you, but this one seems to get louder as it holds the note. It's very supportive instead of a lot of work to play. And who wouldn't want that?"