CHICAGO -- Irene Schultz grew more frustrated every year she faced a new crop of sixth graders in her Waukegan, Ill., classroom.

"A third of my class year after year had to be forced to read," she says. "They felt they couldn't read and they were dumb in school."

Even worse, Schultz couldn't find books to entice these youngsters. They were all either too difficult or too babyish. "These kids needed a whole different kind of literature, with a second-grade vocabulary but a fast plot with older children," Schultz says.

"It was heartbreaking," she notes. "People think these kids don't want to read but they do."

Finally, Schultz decided she would try to remedy the situation herself. Eighteen years ago, she sat down and figured out what might work: a novel with a lurid cover, printed with a lot of white space and airy type. There should be some pictures, she figured, simple sentences and few descriptions.

Schultz came up with a series of stories about the Woodland Gang, referring to the woods behind her Lake Bluff home. The gang includes four orphans who live together with a benevolent housekeeper and manage to have a series of adventures while solving mysteries a` la Nancy Drew or the Hardy Boys.

The difference, of course, is that these books are much simpler to read, though the plots are sophisticated enough to pique a sixth-grader's interest. In "The Woodland Gang and the Museum Robbery," for example, the gang accidentally gets locked in a museum overnight and manages to foil a jewel robbery. Other books deal with lost boys, a spooky old house, a secret spy code and an Indian cave.

But no matter how hard Schultz tried, or how much children liked her stories, she couldn't get a publisher interested. For more than 11 years, publishers turned her down. "They said there aren't enough of these kids to warrant publishing these books," she says. "And they said if these kids wanted to read, they'd read the books on the market."

Schultz figured she had only one alternative: to market the books herself. In 1982, she took early retirement and with seed money from her husband, launched her own publishing company and her first six books. "But I had no idea how to sell them," she says.

Gradually, she built a following, selling about 18,000 books over the next five years across the United States and as far away as Australia and the United Arab Emirates.

"The first time I saw these books, I said this is what we've been looking for," says Eugene Cramer, director of the remedial reading research clinic at the University of Illinois at Chicago and past president of the Illinois Reading Council.

"You have to help kids find fun in reading, and these books absolutely can help."

Cramer says his staff uses Schultz's books frequently, even to help teach adults to read.

Last year Schultz found a publisher, Addison-Wesley. Now 12 Woodland Gang books are in print, along with activity books, and they are being used in schools nationwide. Schultz has 12 new books in the works.

"The market is flooded with easy-reader books," says Judy Bittinger of Addison-Wesley. "But these are different. It's unusual for books to be this easy and have such good plots."

"The point of these books is to bridge the gap from storybooks to novels," Schultz says. She advises parents that it doesn't matter what children are reading, as long as they're reading something.

"You have to start where they are, at their interest level and capability," she says. "If they like baseball, get baseball books." If they love television, read TV Guide, she suggests.

She says she also tries to sneak in some moral messages: If you have a handicap, you still can have a rich life; good guys triumph; the environment should be protected; you don't have to be the best student to be a good person. Schultz calls these books "enablers."

"You have to have success to get a discouraged reader to be a good reader," she says. "They have to have confidence, and they only get confident when they experience success. If you've experienced failure year after year, you'd hate to read. You'd be stupid to love it."