FROM QUILTED hippos to primitive wood carvings, handicrafts just get more popular. And one of the best places to find them is in Grantsville at the Penn-Alps Association's annual Summerfest and Quilt Show July 11 to 13. The show will feature 45 crafts, including glass blowing, blacksmithing, basket and doll making, pottery, woodcarving and quilt making. The festival draws about a thousand people a day.

Penn-Alps, a nonprofit organization dedicated to serving mountain artisans, has been teaching, demonstrating and marketing handicrafts from Maryland, West Virginia and Pennsylvania for 25 years. It began as the dream of Dr. Alta Schrock, who did her doctoral thesis on the upland bogs and swamps of the mountains she loved in Garrett County and nearby Pennsylvania. During trips into the mountains, she was struck by the hard-edged life of the people, and for several years mulled over the idea of using handicrafts to provide both cash and self esteem. In 1958, she called a group of friends together to discuss the idea.

"I told them what I thought the Lord had laid on my heart," she says. "There was no dissent, and I took that as a go- ahead."

Schrock went from door to door in the mountains, "to see what they made, to take samples and talk to them about crafts and to pick up crafts to sell for them."

The growing organization -- whose name reflects its start in the mountain country of Pennsylvania -- also set up handicraft classes and helped revive the arts of spinning and weaving in the area. Among the artisans from those classes that she mentions proudly are bird carver Gary Yoder and painter Edna Moss Bender.

In June 1959, the association bought the 1818 building it now occupies. Wooden beams and pegs and original logs have been uncovered and restored in one room.

Penn-Alps also opened a restaurant in December 1959, because, Schrock says, "we felt we needed the restaurant to draw people to the craft shop." The restaurant, with its emphasis on Pennsylvania Dutch cooking, is a joy for quantity, quality and price, and, like the rest of Penn-Alps, has grown exponentially.

SUMMERFEST & QUILT SHOW -- July 11-13, 11 a.m. to 6 p.m. daily; $2.50 for quilt show and summerfest, $2 for summerfest only, $1.50 for quilt show only; reduced rates for children seven to 12; children under seven free. Sponsored by the Penn-Alps Association, Little Crossings, Grantsville, Maryland 21536. 301/895-5985.