In a secluded mountaintop compound at the end of a mile-long dirt road, workers hammer together a cavernous warehouse of concrete and steel. Cold weather has slowed construction, but by next month, the building will be packed to its arched roof with compact discs and cassettes.

This is the future shipping center of Resistance Records, the world's largest neo-Nazi music label. Since last summer, CDs by bands such as Angry Aryans and Nordic Thunder have been packed and mailed to thousands of fans across the world from this serene setting, a fenced-off, 400-acre spread that doubles as headquarters for one of the country's most notorious white supremacist organizations.

The operation is the brainchild of William Pierce, the 66-year-old founder of the National Alliance and author of "The Turner Diaries," a novel of terrorism that apparently helped inspire the Oklahoma City bombing. Pierce's own tastes run toward the classical--Beethoven is his favorite composer--but he has ventured into the rock business for the most pragmatic of reasons: to recruit young minds to his cause.

"I don't care for the music myself," said Pierce, a rumpled man with a genial smile, in a recent interview in his tiny, cluttered office. "But if it helps move people in the right direction, I'm for it."

These are tough days for racist revolutionaries. A booming economy, low unemployment and years of peace have made it difficult to replenish the graying ranks of white supremacists. Chapters of the Ku Klux Klan are closing and membership levels for white-power groups have been flat or declining for the past decade, according to the Anti-Defamation League.

With an eye toward reviving their fortunes, white supremacists are turning to modern media, like the Internet and rock music. The story of Resistance Records suggests just how desperate--and sophisticated--this search for new blood has become.

"It sounds a bit far-fetched to adults, but rock could be hugely important in terms of enlarging the reach of the American neo-Nazi movement," said Mark Potok of the Southern Poverty Law Center, a group that has studied the National Alliance. "The country's premier neo-Nazi organization is exploiting what could be one of its most effective fund-raising and recruiting tools."

The tale of Resistance Records begins behind the darkened windows of a two-story Detroit home, where the label was launched by a young Canadian skinhead in 1993. It winds through some eminent Washington addresses, including the University Club, an oak-paneled gathering point for the city's elite, where control of Resistance was haggled over last April at a dining table.

And it ends in Hillsboro, a hamlet in the foothills of the Allegheny Mountains, 250 miles from Washington, where Pierce has quietly turned himself into racist rock's leading impresario, selling, he says, roughly $1 million in merchandise a year.

Toward a Separate Piece Hatecore, as the music is known, is gruff, loud and guitar-driven. The vocalists howl like Marine Corps drill sergeants and the lyrics--heavily influenced by the Third Reich--are vehemently anti-government and truculently racist.

"A lot of the ideals that the Germans had during World War II, the country they were trying to create, we think would be ideal," said Drew, the lead singer of the Atlantic City-based Blue Eyed Devils, who declined to provide his last name. "White people don't have a homeland in this world."

The recordings are amateurish both in technical quality and musicianship, but dozens of hatecore acts have built small, ardent followings around the country without the benefit of mainstream advertising or radio airplay and without space on the shelves of mainstream retailers. Buzz about the music--a minuscule fraction of overall rock sales--is generated through the Internet and a network of fans, performers and promoters.

Violence is endemic to the hatecore scene. Skinhead concerts generate such concussive mosh pits that promoters are often reluctant to book them, fearing litigation. The fans are typically male and in their twenties, many of them professionals with decent jobs. They share an unshakable conviction that the white race is headed toward extinction and that saving it requires a rigorous segregation from nonwhites.

"I want everything to be done peacefully," said Bekki Taylor, a 26-year-old hatecore fan who lives in Northern Michigan. "But that's a far-off hope. If it came to war to save my people's blood, I would shed mine."

During the day, Taylor holds down a steady job as a tax consultant and keeps her political views to herself. Out of the office, she fumes that the forces of "political correctness"--a favorite bugaboo of this crowd--have turned her Norwegian ancestry into a source of shame. She's irate that high school teachers portray her Viking forefathers as savages, and she's certain that America's "melting pot" approach is a catastrophe.

As Pierce puts it: "It's not likely we'll emerge from this mess in a peaceful, lovey-dovey way."

A PhD and former physics professor, Pierce is not the stereotypical gun-toting reactionary in olive fatigues. Tall and sporting a shabby dark sport jacket, he looks as though he's headed for the faculty lounge. He has Walter Cronkite's deep voice and surprisingly warm manners for a guy whose fondest wish is the violent overthrow of the U.S. government and the establishment of a whites-only fascist regime.

With "The Turner Diaries," published in 1978, Pierce wrote the white power movement's primary text, a blueprint for revolution that has sold more than 350,000 copies, mostly through gun shows and mail-order sales. A photocopied paragraph from the novel--about white supremacists blowing up the FBI building--was found in the car of Timothy McVeigh, who was convicted of the Oklahoma City bombing.

Finding more McVeighs, and inspiring them to orchestrate their violent energy more effectively, are among Pierce's main goals. His larger purpose, he said, is to bring about an America free of all minorities, though what would become of blacks, Jews and Hispanics, he won't say.

"A lot of separatists have worked out elaborate theories, with Southern Florida and parts of Brooklyn going to the Jews and other parts of the country going to other groups," Pierce said, stroking a Siamese cat nestled in his lap. "That doesn't make sense to me. We don't have the power to divide up the country, and if we do, we don't have to make a deal with anybody. We can do whatever the hell we want."

Resistance and the National Alliance are run with a staff of nine employees, several of whom live in houses on the compound. An imposing 10-foot-high rune symbol, signifying life, is affixed to the building's corrugated steel front. Pierce's office is in the back, where he works 10-hour days accompanied only by his cat and piles of papers, magazines and books. There are two copies of "Mein Kampf" on the shelves behind his desk and a copy of the Jerusalem Post lies at his feet.

The second floor houses the National Alliance's mail-order operation, two large rooms of racist books, videos and music, an Amazon.com of hate. The standard antisemitic tracts are for sale here, including "Protocols of the Learned Elders of Zion" and "Jewish Ritual Murder." There are some surprises, too, like a biography of record magnate David Geffen.

"It's a revealing portrait of a degenerate homosexual Jewboy," Pierce explains.

Having purchased a Swedish competitor a few months ago, Resistance carries 250 different titles and stockpiles nearly 80,000 CDs. There is no recording studio or even a guitar in sight; Resistance merely takes and processes orders here, through the mail and via a slickly designed Web site.

Pierce won't say much about the label's finances, aside from claiming it's breaking even after a period of heavy investment. About 50 orders a day arrive, he said, with each order averaging about $70 worth of merchandise. That would make Resistance a modestly successful small label, one of dozens in the United States.

Changing Hands Resistance was founded six years ago by George Burdi, a Canadian neo-Nazi with a temper and an entrepreneurial streak. The label reportedly sold about 50,000 CDs in one year, but by 1997, Resistance was in shambles. Burdi was sentenced to a year in prison for assaulting a woman, and Michigan authorities had raided the label's offices and seized documents, alleging tax fraud.

In 1998, the label was acquired by Willis Carto, founder of the right-wing Liberty Lobby--who controlled his shares through his Foundation for Economic Liberty--and Todd Blodgett, a former low-level Reagan White House staffer and protege of the late GOP strategist Lee Atwater.

Today, these former partners agree on only two things: that buying Resistance was the other guy's idea and that the label turned out to be a lousy investment.

"It was strictly business," said Blodgett, whose TAB Agency Inc., a small marketing and consulting company in Washington, once sold advertisements for the Spotlight, a Liberty Lobby publication. "I in no way endorse or condone the underlying premise of the music in question."

"The staff of the Liberty Lobby had nothing to do with Resistance," said Gerald Mizell, a spokesman for the group. "It was run by Mr. Blodgett."

According to Blodgett, Carto purchased a piece of the label, hoping to recruit younger members to the Liberty Lobby and new readers to the Spotlight.

"He wanted to rejuvenate his operation," Blodgett said of Carto. "Take a look at the Spotlight." The newspaper was "filled with ads for denture adhesives and incontinence underwear. The readership is aging."

The label was relocated to California, but Carto soon faced financial problems. After falling out with Blodgett, Carto decided to sell his stake in the company. Through an acquaintance, Blodgett heard that Pierce was interested. One Saturday night in April of last year, Blodgett and Pierce quietly sorted through the details of a complicated new partnership over dinner in the Taft dining room of the University Club, where Blodgett is a member.

Hundreds of Resistance CDs were shipped from California to Blodgett's office in the basement of the Kennedy-Warren, an upscale apartment building in Cleveland Park. The inventory wasn't there for long. Anonymous phone calls to the Kennedy-Warren's front desk alerted management about the music and Blodgett was politely asked to ship it off the premises. He happily obliged.

By now, Blodgett was eager to end any connection to Resistance. He sold his stake to Pierce, losing money on the deal, he said. By September, all of Resistance music had been transported to Hillsboro.

Hunkered Down Few in Hillsboro, best known as the birthplace of writer Pearl Buck, are aware that their town has become hatecore's world capital. The 215 residents here barely interact with Pierce, who largely keeps to himself, aside from the rare trip to the post office. When he first moved in, authorities were worried enough about his organization to pass a law limiting the right to train paramilitary troops in the area. But nary a shot has been heard from the place and none are expected.

"He's a keenly intelligent individual," said Jerry Dale, Hillsboro's sheriff. "He's not going to cause problems in his back yard. He's more like a coach for impressionable young men. His violence is in his writing."

Though Pierce calls Resistance's music "godawful," buying the label was a natural move for a savvy marketer who has long taken a multimedia approach to peddling hate.

Raised mostly in Texas, where he went to a military high school, Pierce spent the first half of his life as a physicist, interning at Los Alamos National Laboratory before working at other leading facilities. In the 1960s, he landed as a professor at the University of Oregon, where the civil rights movement and hippie protests against the Vietnam War convinced him that racial equality is a form of madness. Democracy, he further decided, isn't such a great idea either.

Quitting academia, Pierce ended up in Washington, working for George Lincoln Rockwell, head of the American Nazi Party. He published a newspaper in D.C. for years, but by the early 1980s, Pierce was fed up with Washington and moved to Hillsboro, buying acreage there with $95,000 in cash.

Today, from the compound's recording studio, he produces a weekly radio show, which he pays to have broadcast on a handful of stations across the country. Several National Alliance Web sites are managed on the premises, as are a variety of newsletters and magazines.

Orders for music and books are processed and packed by a pair of skinheads who live nearby. Brown cardboard boxes of Resistance music spill all over the largest room in the building, with haphazard stacks of CDs by bands like Beserkr, Skrewdriver and dozens of others. The label has now outgrown the premises, which is why Pierce started work on the 1,800-square-foot warehouse now under construction across the dirt driveway.

Day-to-day decisions about the label are in the hands of a former boxer and hatecore concert promoter who works from his home in Cleveland. Erich Gliebe's job is to hunt for and sign new talent. He also edits Resistance magazine, which offers flattering reviews of hatecore CDs and helpful hints about, for instance, "planning a skinhead infantry."

Pierce knows that a mass uprising, or even sustained acts of racially inspired terrorism, aren't likely without a spike in the unemployment rate. Winning over the poor and middle-class young men who are his target audience has never been tougher, he grumbles, and not just because of prosperity. Kids today don't read.

"They just watch television and listen to music," Pierce said. "And a lot of these kids are [ticked] off. My aim is to give them a rationale for their alienation, to give them a target for their anger."

He'd also like to see a little more professionalism from the performers. Most of them are part-timers, and too many of them end up shot dead or tossed in jail. Aggravated Assault isn't just one of the most popular bands, but an expression of the genre's way of life. Bound for Glory's lead singer was murdered, as was the vocalist for Nordic Thunder.

"But," adds Pierce with a wry smile, "we're going to start shooting back."

Staff researcher Richard Drezen contributed to this report.

CAPTION: Hatecore bands such as Max Resist, here in Detroit, attract fans who are typically male and in their twenties.

CAPTION: "I don't care for the music myself," said William Pierce, founder of the white power group National Alliance and new owner of Resistance Records. "But if it helps move people in the right direction, I'm for it."

CAPTION: The new owner of Resistance Records is William Pierce, National Alliance founder and author of "The Turner Diaries."