WHEN ERIK Koefoed decided to drop out of Cornell University, relinquish any hope of a carreer as a classical flutist and move down to Washington, his family thought it was just another of Erik's half-baked ideas.

So he explained recently, as he placed 500 pounds of flour, 51 pounds of malt, 8 pounds of salt, 5 pounds of yeast and a like quantity of water into a giant mixer to prepare the dough for the next day's estimated 200 dozen bagels.

On Aug. 15, the 27-year-old Koefoed opened the Georgetown Bagelry, one of only two bakeries in the Washington area where New York-style bagels are made on the premises daily.

"I can only give you an estimate on how much stuff we are using because it changes every day," Koefoed explained with a smile on his fatigued face. "On Thursday we were making 75 dozen a day, and by Sunday we were up to 200 dozen."

It was 6 a.m., and Koefoed had been working for almost half an hour at his 3245 M St. location. Twenty-one-hour days take their toll on the body, he acknowledged, as he polished off his second large cup of coffee.

Koefoed is gambling that once he has paid back the $183,000 Small Business Administration loan, he will begin to make lots of dough -- the green variety.

Back in January 1980, Koefoed -- who was making bagels in Ithaca, N.Y., by day and studying the flute at night -- came to Washington to visit. "Just for comparison's sake, I tried the bagels here. I couldn't believe how lousy they were," he recalled. "I was surprised that a city that was supposed to be so cosmopolitan had such lousy bagels."

Koefoed realized that if he were to set up a store here, "my only real competition would be from Bagel Master. A couple of other places made things they called bagels, but only Bagel Master was using the 'authentic New York process,' " maintained the young entrepreneur. "I believe if the people of this city are offered a great bagel, they will buy them in large numbers."

With the guidance of Bill Rocco, a 15-year bagel-making veteran from Ithaca; Craig Cole, the president of Bagel Services Unlimited; and financial adviser Dan Russell, who works for Hechinger, Koefoed prepared an outline for the store, cost analysis and budget, and attempted to persuade several local bankers and realtors that Washington needed its second bagel bakery.

"The best way to convince them was to let them taste the product itself," Koefoed said. "So on more than one occasion, I made a fresh bunch of bagels at 1 a.m. and drove straight down from Ithaca a seven-hour trip so that the businessmen would have them fresh on the table for the 8 o'clock meetings."

Despite his French, Danish and Jamaican heritage, the baker is convinced he understands the quintessential New York bagel. "It should be plump, have a crispy exterior and a soft chewy interior," he explained. "It's got to tear nicely and have a strong aroma. I really think I should have a nice old Jewish man run the place -- it would probably be better for the image of the business."

Koefoed believes his business can coexist with Bagel Master. "I don't want to get to be as large as they are. Right now, they supply practically all the stores in the entire area -- including Giant and Safeway. They make between 7 and 9 thousand dozen bagels a day." (Bagel Master vice president Jack Singer declined to discuss specific production figures or clients.)

"My final product is a direct reflection of myself," Koefoed said. "Making bagels can be developed into an art, or it can be a schlock process. I may do some wholesaling, but for the most part I'm going to remain a retailer. I'd like to have one or two outlet stores, like on Capitol Hill or Dupont Circle, but right now I can't afford to do that. I don't want to make more than 1,000 dozen a day. If you make much more than that, you have to sacrifice something -- like freshness. One of the tricks used by some bakers is to undercook the bagels so that they will stay fresher longer, but they become doughy instead of chewy. I don't want that to happen with my business."

"I think the key to making a New York bagel is New York water," said Sue Veasey, a transplanted Piscataway, N.J., native who recently lunched at The Georgetown Bagelry. "The bagels here are delicious. In fact, I could eat about a dozen of them. But it's still only a close second to New York because of the water."

Koefoed disagrees. "I think it's a myth that New York has special water," he argued. "If people are unable to distinguish the taste between the water in New York and the water in Washington, then it can't really have that much affect on the taste of the bagels. Yes, there is a difference, but I doubt the average palate is discerning enough to distinguish between the two cities. The way the water is used in the bagel-making process, however, does makes a difference."

How does Koefoed imitate New York's finest? The key, according to the muscular ex-football player, is in the bagel-making process.

First Koefoed heats up his drum-shaped boiling kettle and his five-tray rotating oven. He prepares the dough the day before baking to allow it enough time to rise properly. High gluten flour, malt, water, yeast and salt are combined in a mixer for about 35 minutes -- even to 12 minutes longer than for yeast breads -- to ensure that the bagels will have a spongy, elastic interior with more air bubbles. Once mixed, the mountain of dough is cut into manageable 35-pound slabs. Next, Koefoed feeds individual slabs into the bagel-forming machine. This machine rolls the dough into strips and deposits the strips on a conveyor belt, where the two ends are connected around a cylinder to form the doughnut-shaped bagel.

The bagels are then placed on cornmeal-sprinkled boards, 35 bagels to a board, and set on proofing racks -- in insulated zipper bags -- a procedure that allows the dough to rise. After 30 minutes, they are transferred to a refrigerated walk-in box for at least six hours. This process, explained the bagel maker, retards the yeast's development.

Before baking, Koefoed dumps the bagels into the boiling kettle of water for approximately 15 to 40 seconds. If a bagel has not been proofed sufficiently, it will immediately sink to the bottom of the boiling kettle and must be discarded. "Boiling gives the bagel that shiny glaze found in New York bagels," he said. They are then placed on burlap-covered boards that have been dampened to prevent the bagels from sticking, and are seasoned with poppy seeds, onions, garlic, salt or sesame seeds. Finally the bagels are slipped into a 500-degree oven and flipped over once a skin has formed on one side. They are baked for nine to 12 minutes.

According to Koefoed, "The boiling water and burlap board treatment are what makes them taste like they came from New York." Bagel Master in Wheaton uses the same process. Posin's in D.C. and Bernstein's in Silver Spring also make bagels daily, but immediately transfer their product from the proofing rack to the ovens without benefit of the water bath. At present, Koefoed makes three bakes a day -- one in the morning, one around 2 p.m. and a final bake, if necessary, around 6 p.m. -- to ensure that fresh bagels are always on hand.

"I moved to Washington seven years ago," said Michael Hartog, a native New Yorker, "and until I tried these, I'd never bought a decent bagel in this city. I go up to New York every six or seven weeks, and it's established policy that I always bring back 3 dozen on the shuttle. I worked for 12 years on Wall Street and had a bagel every morning. I'm a bagel maven, and these are New York ones."

Like Hartog, many business travelers regularly board the New York shuttle with bags of bagels to appease hungry colleagues back in Washington.

"I worked in a bagel place in New York," said John Buatti, a Georgetown student from Douglaston, Queens. "This guy is gonna just clean up with this business. His bagels taste like the ones in New York; it's a good product at a reasonable price" (25 cents apiece and 35 cents for specialty bagels).

William Horn, a Georgetown businessman who emigrated from Poland, says he knows a good bagel when he tastes one. "I think these are the very best in Washington," he said after buying a half a dozen. "I have eaten at all of them -- Posin's, Bagel Master, you name it, I've tried it. These are fresher and bulkier."

The bagel maker is also trying to expand his menu by offering a variety of bagel sandwiches. So far, Koefoed sells three specialty bagels -- honey-whole wheat, cinnamon-raisin and onion-rye -- in addition to plain, sesame, poppy, onion, garlic and salt varieties. Specialty cream cheeses -- like brandied peach, honey, raisin and ginger, bacon and horseradish, spiced clam dip and a herbed cream cheese -- are also stocked.

Koefoed says many more bagel creations and toppings will be added: "I'll have time for the creative aspect of this business when I can just get the basic stuff out of the way."