Open Monday through Thursday, 7 p.m. to 2 a.m.; Friday and Saturday until 3 a.m.; Sunday, noon to 2 a.m. Kitchen open 7 to 10:45 p.m. daily and noon to 4 p.m. Sunday. AE, MC, V. Reservations. Prices: Appetizers average $3.25, main dishes to $9.

DINING and dancing is one of those wonderful ideas that somehow usually works to the disadvantage of one or the other activity. The choice seems to be between dining and dancing or dining and dancing . When dining is the central focus, the dancing may be off in another room or only at odd hours (sometimes only after the kitchen is closed). When dancing is the main theme, dining may be a backhand attempt at bringing in easy revenue at whatever cost to your digestive system.

In a not-quite-random sample of dining and dancing opportunities in the Washington area one emphasized the dining, one emphasized the dancing, and the third one found a balance that was just right. So I'll start with the third, the dessert of this sampler.

You might get the idea that Lost and Found does not want your business, given its lack of a sign outside. You simply have to guess that the low yellow building is the one you want. Inside the entrance a sign announces, with no wasted words, that this restaurant and disco is run by and for gays. That, however, is the last time straights are made to feel less than welcome through an evening of dinner and dancing.

Dining and dancing are segregated activities at Lost and Found; in fact, the rear dining room is well-shielded from the disco music so that gracious dining continues late into the evening. The dining room is dramatic, very dimly lit under a soaring sky of metallic planters that look like a newly discovered constellation. Walls are dark red stucco. Our blue tablecloth had crumbs swept under it, but that was the only notable environmental flaw.

What one finds at Lost and Found is extremely suave service from waiters who know their food and their job.They continue to be attentive throughout the meal, though in the dimness it is difficult to catch a waiter's eye if you need something.

Praise of the service is not meant to shortchange the food, which is an imaginative choice at decent prices, seasoned with a flair that seems Southern, perhaps because of the enthusiasm for black pepper. Start with fried potato skins, those fashionable crunches that are particularly fresh, mellow and crisp here. Or have mushroom caps stuffed with fennel-scented hot Italian sausage and cheese. Soups are homemade but lack the verve of the other dishes. Among the main dishes, veal francais is crumb-coated and fried, not quite French but nevertheless tasty. The vaguely Oriental pork and mushrooms dish is zesty, laced with soy sauce.Simple foods-prime rib, for example-are fine; elaborate preparations-crepes and cream sauces-show the kitchen's weakness. Not much attention is showered on side dishes; the tossed salad and frozen green beans with almonds are forget-table and the "fresh baked bread" is a loaf of vague white fluff with more visual than gustatory charm.

Besides a moderately priced wine list of moderate aspirations, Lost and Found has Los Hermanos house wines, $4.25 a liter.

Dessert is but a choice of Haagen-Dazs ice creams and Le Sorbet sherbets, ineptly stored so their texture has turned icy. The best ending is fresh strawberries.

While Lost and Found does not blend dining and dancing as F. Scott's does, it facilitates an evening of comfortable dining and then dancing. The floor gets crowded, the bar gets crowded, the dancing gets better as the evening gets later. There are very few women in Lost and Found, but whatever discomfort they or their escorts might feel is their own doing, for the emphasis is clearly on everyone having a good time in his own way and leaving everyone else to do the same.