NEW YORK STATE'S God Street Wine is the latest improvising rock group to build a strong live following in the "jam-band" underground without major-label help. After God Street Wine sold out the 1,000-seat Irving Plaza in New York on its own, Geffen not only signed the band but also offered them their own custom label, Eleven Records. After three self-released albums, God Street Wine's Geffen debut, "$1.99 Romances," separates the group from the jam-band pack by using Steely Dan as its main model rather than the usual choices of the Grateful Dead or the Allman Brothers.

Founded by a trio of students at the Manhattan School of Music in 1987, the quintet has the chops and know-how to incorporate jazz chords and swing rhythms into its songwriting and improvising. The result is not jazz but rock 'n' roll with a jazz flavoring. Songs like "Mile After Mile" and "Imogene" sound like Steely Dan outtakes, and hints of that inspiration can be found in every song. As a result, God Street Wine opens up its songs not by playing more notes but by playing different notes, and this tastefulness is reinforced by the clutter-free production by Memphis veteran Jim Dickinson.

God Street Wine's chief singer-songwriter Lo Faber isn't as sophisticated a lyricist as Steely Dan's Donald Fagen, but for the most part he avoids the sophomoric ostentatiousness which mars the lyrics of Phish, the Spin Doctors and similar jam bands. At their best, on songs like "Thirsty" and "Crazy Head," Faber's lyrics resemble the hippie-cowboy aphorisms of the Dead's Robert Hunter.

GOD STREET WINE -- "$1.99 Romances" (Eleven/Geffen). Appearing Thursday at the Bayou. To hear a free Sound Bite from this album, call 202/334-9000 and press 8115.