About two years ago, consumers were alarmed by reports that apples -- the very image of healthful food -- might contain residues of a chemical called daminozide, sold under the name of Alar. It regulates the growth of apples and improves fruit quality.

Alar is also suspected of causing cancer.

In a report on baby foods last fall, the chemists at Consumer Reports recommended that parents steer clear of "adult" applesauces and juices for their babies. Their reason was that baby-food makers had been rejecting apples treated with daminozide since early 1986.

Daminozide is absorbed inside the fruit; you can't wash it away or peel it off. Apple juice, cider, applesauce and other products made from treated fruit are likely to contain some traces of the chemical.

A year earlier, the Environmental Protection Agency had proposed a ban on Alar, prompted by studies showing that the chemical and a contaminant (UDMH) produced cancerous tumors when fed to laboratory animals. If Alar could indeed produce cancer in humans, infants would face a special risk. They eat many more apple products per unit of body weight than adults do.

Now, however, it's not necessary to distinguish between adult apple products and those sold by makers of baby foods. Both show similarly low residues of daminozide, and most processors and major food retailers refuse to accept Alar-treated apples.

The EPA decided not to ban Alar after a scientific advisory panel concluded that the animal studies were inadequate to show that Alar and UDMH were in fact carcinogenic, or how much risk they might pose.

But consumer pressure on the agency, including a lawsuit by the Natural Resources Defense Council and Public Citizen seeking an immediate ban, kept public concern high.

Makers of baby food promptly said they would reject apples treated with Alar, and virtually all other apple processors followed suit, as have many large grocery chains.

As a result, apple growers have greatly reduced their use of Alar. Apple processors and Alar's manufacturer, Uniroyal, say the chemical is now used on only about 10 percent of fresh apples and on almost no processed apples.

To find out how much Alar remains in apples, Consumer Reports' chemists tested 100 samples of adult and baby-food apple products. All were purchased a year ago after cutbacks had occurred in Alar use. Included were 52 samples of apple juice, 31 of applesauce and 17 of raw apples.

Only seven of the 100 samples had detectable amounts of Alar (0.5 parts per million or more). None of the baby foods tested had detectable Alar.

Nationwide sampling by Uniroyal has yielded similar results. Uniroyal looked at the same apple foods that the chemists did, but in greater amounts: 730 samples in all, from 72 areas around the country. Uniroyal's analyses also showed a significant decline in Alar residues over time, especially in fresh apples.

Meanwhile, questions remain over how toxic Alar and UDMH actually are. Early results of a study now underway, sponsored by Uniroyal at the EPA's behest, have not shown that Alar is carcinogenic. It will be several years before final results have been fully evaluated.

For now, with most apple growers avoiding Alar, exposure has been greatly reduced. When the current toxicity studies are complete, the EPA will need to review Alar's status and either ban the compound entirely or declare it safe to use again.