Let's say you want to have a holiday party and invite Leo from work, Patsy from softball, Jane from college and Sam from pottery class.

If you're worried how all these different people will socialize with each other, my friends Mike, Caren and Alan have the perfect solution: Host a gift-exchange party where everyone brings a wrapped present that's under $10 or $15.

Or, do a white elephant version and ask guests to bring something from the shelves at home.

At their party last year, about 30 guests showed up. The conversation flowed smoothly as everyone uttered opinions on what box to choose and then whether or not the gift invoked envy.

I left with a $15 gift certificate to Tower Records (perfect for buying something for myself or another person on my list). My friend Beth, who had driven down from Philly, scored a box of Godiva chocolates.

Another pal, John, got a harmonica, which he began playing, fairly well, on the spot. But some poor soul wound up with the book nobody wanted to read, the Starr Report, while another looked forlornly at his copy of Alanis Morissette's new CD, which he tried to auction off at many points during the exchange.

Here's how it works: At some point in the party everyone receives a number. Those with the high numbers are the lucky ones--they can prey upon gifts lower-numbered people have opened. The rule of thumb is that upon your turn, you can either choose a mystery package from the pile or you can acquire an opened gift you've been eyeing. Then the person whose gift you've taken chooses again from the wrapped pile, or snags a gift from a person with an even lower number than his. It's a brutal game and there is much good-natured whining.

At Mike, Caren and Alan's event, the most heavily traded objects included a set of six Pilsener glasses, two, count 'em two, videos of the movie "Swingers," and a wok from Crate and Barrel.

Caren told me privately she always spends a little more than the limit, to make her gift desirable. It was soon obvious that not everyone was as generous as Caren.

You never know what will cause gift-envy. Matt sprang for a big square box and found himself the not-so-proud owner of a Giant Volcano game (it supposedly erupts), apparently chosen with care from a Smithsonian gift shop.

He thought he was stuck with it until late in the game a woman who had been sitting quietly on the sidelines nimbly relieved him of it. On the other hand, my husband, Kevin, nabbed a nice-sized bottle of Skyy vodka that no one even gave a second glance to. Maybe that's because he hid it under his chair.

Big gifts seemed to vanish first, small gifts, such as obviously wrapped CDs, stayed on the table the longest. The very last gift to be selected was an "X-Files" calendar, which I am ashamed to admit, was the item I had lovingly selected and brought to the party.

The key next time, those sitting in my vicinity agreed, is to disguise gifts in bigger boxes so people would be tempted to see what treasures are inside. The problem with my calendar, I like to think, is that the shape denied the picker any mystery.

Mystery, however, can be dangerous, as Dan discovered when he opened up a box containing his brand new . . . Rolodex. We're not talking a fancy number, just the plastic-and-wood kind. "I love it," Dan claimed, although no one believed him. "I could've taken that from my office," said Mike, voicing what everyone probably was thinking.

Rolodexes aside, the gift exchange can be the perfect opportunity to shop for others on your list. Diana wound up with a Southwest-style picture frame. "This is going to Matt's mother so quickly," she said. In case the giver was listening, she deftly explained, "It's not my colors."

Another Dan, who had come from New York for the annual event, picked one of the last numbers. He tortured the crowd by slowly looking over everyone's goods. When asked what he was considering, Dan replied, "The Good Sex Book," the Pilsener glasses, the wine glasses or "my own gift, which was 'Swingers.' " After a few trades, he wound up with "Swingers."

Caren broke party etiquette by deliberately choosing her own gift, a 1999 Zagat's guide to Washington and five scratch-off lottery tickets. In the name of justice, it was promptly taken by someone else. She didn't seem to mind. After all, there's always next year.