OUTSIDE, the steamy night air hung as thick as peanut butter over the South Carolina swampland.

Or as Pedro might put it: "Outzide, it ees one beeg hot tamale!"

The big trucks rolled up and down I-95 a few hundred yards from my motel window, their roar so regular I began to imagine that I was near an ocean, that aheavy surf, not big rigs, provided my lullaby.

Or as Pedro might say: "Esses zoom zoom all night, eh, senor?"

Si, Pedro, zoom zoom all night, you little fox.

You all know Pedro, senory senoritas. You've seen him around Washington -- all around the country -- on bumper stickers that read "SOUTH OF THE BORDER." He's the little Mexican character, the fat cartoon figure slouched against the word "SOUTH," a sombrero covering his face. You probably thought the car in front of you had just returned from a Mexican vacation, though you eventually saw enough bumper stickers that finally, perhaps by the 10th, you wondered, "Just what is this South of the Border stuff anyway, Jack?"

And then you took a driving trip south, perhaps to Florida, Atlanta or a South Carolina resort. Like everyone else on the eastern seaboard, you travel I-95, the concrete python that links Maine with Miami.

As you enter North Carolina, the signs begin. "NO MONKEY BUSINESS," reads the first one, "JOOST YANKEE PANKY." For 168 miles the signs appear more frequently, their wacky messages painted in vivid colors: "LONG TIME, NO SI! SI PEDRO TODAY, SIESTA TOMORROW!" "WHEN YOU'RE HOT, YOU'RE HOT! COOL EET WEETH PEDRO!"

Near the North Carolina-South Carolina border the billboards are placed every mile. If your passengers are children, they are clamoring to meet Pedro. The temptation is difficult even for an adult to resist; during three hours of tedious interstate driving, you have been subjected to a kind of highway hype not seen since the heyday of Burma-Shave signs.

Exiting at the place the billboards call South of the Border is nearly preordained. Why not gas up here, stretch a bit? Sift through mounds of Mexican-style souvenirs. Grab a burger, some coffee. Spend the night. You're in good company; according to management, Joan Crawford, Gypsy Rose Lee, Rita Hayworth and Rocky Grazano have slept here, along with more than 24 million Mr. and Mrs. Front Porch Americans.

So pull over, spend a little. It's part of a finely tuned plan that testifies to America's love for the offbeat, demonstrates the power of clever advertising, and proves it's possible to get rich with kitsch.

I know, because I spent a weekend at South of the Border. I wanted to learn why so many people like to spend so much money at this place. I wanted to find out why, when the weather turns cold in Washington, thousands of families hurrying south for warmth will turn off I-95 to patronize Pedro. How did this place come to be? What wizard sits behind the controls and orchestrates the marketing approach that has succeeded in making people believe the more money spent here, the more fun it is?

I learned the answers but not before I tried it all: I bought a floppy sombrero, ate the Steak Mexicaine (for $9.95, "zee steak zat made Pedro famous," as the menu puts it), and loaded up with (legal) fireworks. On my last night I took a walk on the wild side, booking the Presidential Suite with its sunken bath, bidet and double waterbed. This, I told myself from the beginning, was an assignment to be taken seriously.

South of the Border is not just another roadside attraction.

Employes call their 107-acre village "The Border." They call the giant, metal replica of Pedro -- said to be the largest neon sign east of the Mississippi -- "the big fella." Boasting four miles of wiring, weighing 77 tons and standing 18 feet deep in solid clay, the big fella is a beacon rising out of the Border's sprawl. Along with more routine power demands, the giant sign helps account for the $40,000 worth of electricity the Border gulps each month. In Dillon County, S.C., nobody does it bigger.

One man owns this place. He is a shrewd senor named Alan Schafer who 29 years ago built a beer joint out of cement blocks hard by the border of a "dry" North Carolina county. He parlayed that bar into a $15 million-a-year business. The birth of the nation's interstate highway system and the blessing of two exits that feed right into Schafer's complex (more about that later), worked to his advantage.

Not that Schafter can relax. Right now, for example, he is watching his balance sheet with some concern. The problem: cut-rate airline fares threaten to lure many travelers out of their automobiles and into airplane seats.Fewer cars mean less business for Schafer, and this winter he worries that what he calls his "Cadillac trade" will choose to fly south rather than drive.

"Now when we get a Cadillac," he says sarcastically, "it's either a Washington pimp or a chauffeur driving a wealthy person's car down while they fly."

Schafer, a native of South Carolina, is a trim 63-year-old businessman who -- despite his position as Dillon County's wealthiest person, its largest employer and a generous contibutor to charities -- once played a rebel's role in the politics of his community.

"Early on I made up my mind if I ever got a chance to cut those bastards' throats, I would," says Schafer of South Carolina's political establishment.

His resentment stems from an incident that occurred prior to the 1944 presidential election. His father was a respected man in the small town of Little Rock, S.C. He owned a general store (as did his parents before him), built the first synagogue in the county and was particularly proud to be an executive committeeman in the state Democratic party. He became seriously ill in the early 1940s, so ill that the younger Schafer returned home from the University of South Carolina (where he was majoring in journalism) to help manage the family business.

"When the election came up in 1944," Schafer recalls, "Dad had gone to Sloan-Kettering. I asked a guy I thought was a friend of his to elect Dad an honorary committeeman. The guy promised me he would, but they didn't. And it damn near broke my father's heart."

Alan Schafer never forgave that slight, and he set out to control the local Democratic organization. Schafer's mother had died in a flu epidemic, and he was raised by a black woman. He attended a neighborhood Baptist church (during Jewish high holidays, circuitriding rabbis offered services for the few local Jews), and Schafer knew the black community as well as the white. That familiarity paid off.

"I went out and registered every black citizen in the Little Rock precinct," Schafer recalls. "Then I took control of that nucleus of 140 to 150 voters and I've had it ever since. With that black base, I took over the county machine. The Ku Klux Klan used to follow the trucks of my beer-distributing company around. I was a pariah in the white community."

Schafer clearly relishes his maverick past, though today he is very much the insider. For 16 years he's served as Democratic county chairman. In 1968, when all around him at the Democratic convention in Chicago were "hollerin' for Hubert Humphrey, I sat in the front row of the South Carolina delegation wearing a 'Draft Ted' hat and banner." He says he was the first political figure in eastern South Carolina to publicly support Jimmy Carter for president.

Schafer's southern accent and homilies (of his congressman, John Jenrette, he says, "Did you ever hear of people gettin' above their raisin'?") fit his South Carolina upbringing. But at times his Jewish heritage, modish clothes and aviator glasses, his liberal politics and late-into-the-night work habits seem to set him apart from some of his fellow South Carolinians.

Schafer is a southerner when it suits him. He's also Jewish when it suits him. Over the years, for example, his use of the Pedro character has earned him the enmity of some who think he perpetuates for commercial gain an unfair stereotype of the lazy, crafty Mexican.

When accused of that, Schafer readily admits he "plays on being Jewish in a small, Southern community. They usually come back with a sympathetic letter saying, 'Oh, you poor baby.' Once, a Mexican embassy guy wrote to a senator from New Mexico saying his embassy was hot, that we gave employers a bad image of Mexicans. I told the senator we had 100 good-paying jobs, above the minimum wage, with chances for advancement, and he should send some Mexicans down. I never heard from him again. They lost a chance to give jobs to 100 Mexicans."

When the Jewish Anti-Defamation League complained about Schafer's menu notation that read "almost-kosher Virginia ham," he fired back a letter saying, "I'm almost kosher myself." There is, says Schafer, a "power to being Jewish -- you hear about persecution, but most people think you're a lot smarter than you are. I's a nationwide syndrome."

Lots of people in South Carolina think Alan Schafer is smart, and for good reason. How many other people could make a fortune from restaurants and a motel built, if there ever was such a cliched place, In The Middle of Nowhere? Who else could have created an atmosphere in the lowlands of South Carolina that somehow encourages people to buy Mexican -- not Confederate or antique -- but Mexican souvenirs? What, one must wonder, would people be filling their car trunks with if South of the Border did not exist to peddle sombreros, maracas, and stuffed toy bulls?

"There was a time when Americans stayed put," wrote Tom Robbins in his novel Another Roadside Attraction. "For the majority of them, journeys were short and few. Consequently, their live entertainment came to them. The circus, the carnival, the dog and pony shows, the Wild West extravaganza, the freak show, the medicine show, the menagerie brought to towns and villages on their muddy itineraries glimpses of worlds which the sedentary folks had never visited; not just ethnic and geographical oddities but the worlds of romance and glamor and adventure and style. As we became urbanized and sophisticated and, above all, mobile -- highly, highly mobile -- the touring attractions naturally declined. That there is still potency in their imagery, fascination in their naive promise of magic, exotica and unknown quantities, is evident in the proliferation of roadside attractions. Today, the tawdry wonders do not come to us, we go to them."

South of the Border is the kind of place you either love or hate. It's not possible to stop simply for gas and not have an opinion about the lurid neon signs and building decorations, the out-of-place Spanish (well, sort of) architecture that assaults the senses. Perhaps you venture deeper into the complex from the gas station because your eye has been caught by the novelty, the sheer commercial chutzpah of the place. Or because you want to wallow in the kitsch of it all.

What Schafer and his several hundred employes are running here is a roadside fantasy that relies on the willing suspension of belief by customers. You must forget you are off an interstate in South Carolina and believe, because your trip compass went berserk, you are in the middle of a Mexican village. Well, sort of.

But don't get too carried away and try to speak Spanish. At the motel registration desk, staffed by men and women wearing bright Mexican-looking clothes and sombreros, I watched a Puerto Rican couple whose van had New York license plates struggle to communicate in broken English. They had begun speaking in Spanish, which only drew blank, confused looks from the desk clerks.

When I registered, a clerk pointed to a teen-aged boy leaning against a bicycle, a sombrero dangling on his back. "The pedro will show you to your room," I was told.

In my car, I followed the, uh, pedro through the maze of 304 motel rooms to my door. He got off of his bicycle and handed me a bag of ice as I entered my room. I asked him if the sombrero cord around his neck didn't sometimes hurt as he pedaled around the Border. He allowed as how windy days were particularly painful.

My room had a cement block wall. The green shag carpeting was a bit worn. My bed and dresser were Mediterranean style. The lime green bathroom had a sliding glass shower door that looked as if it was made from the bottom of Coke bottles. The ceiling was stucco with artificial wooden beams painted blue.

It is late. I have been traveling all day. I should go to sleep, but I find I must wander around South of the Border. I recall an essayist's observation that "all man's misfortunes derive from a single source, namely from the fact that he is incapable of staying still in his room. And the fortune of kings consists of being surrounded by people with the sole job of providing entertainment for them, thus preventing them from thinking about themselves."

Well, the Border seems designed with just that weakness in mind, though a press release describing it as "a mecca of excitement" overstates the case a bit. It's more like a mecca of merchandising.

Fort Pedro sells a massivearray of legal fireworks. The Leather Alone Shop sells leater goods. Circus Maxicanus, despite its name and replicas of animals outside its tent-shaped building, is a souvenir shop. So are the Mexican Shop West and the Mexican Shop East. There's a linen shop, liquor store, drug store with a small display of dirty books, three gas stations selling different brands and a convenience store. For food there's an ice cream parlor, a fast food place, a steak house and several middle-of-the-road family eateries. Concessions, rides, an arcade with electric games, golf course, swimming pools, gardens and playgrounds break up the commercial areas.

On a good Saturday, the complex will ring up about $110,000 in sales, according to Jim Holliday, the Border's general manager. Holliday explains that one important marketing trick involves keeping the merchandise bins in the souvenir shops near the point of overflowing.

"The fuller you keep them," he says, "the more you sell because people say, 'Well, this must be the thing, they've got a lot of them.'"

The Border has lots of everything for sale. Shirts from Pakistan. Marble statues from Italy. Straw hats from Taiwan. Bull whips from India. Hundreds of thousands of novelties with the Border's logo affixed: Border pencils, plates, cups, shirts, cigarette cases, toothpick holders, nightgowns, even reproductions of the Border's billboards. Lest those bins become less than full, $4 million in merchandise is stored in warehouses in the rear of the complex, back by the South of the Border water tower, fire department, sign-painting company and sewage treatment facilities.

The all-time best-selling souvenir is Item E-31, an amber glass ashtray with Pedro and the Border's logo on the bottom. The Border sells boxcars of the made-in-Taiwan ashtrays at 50 cents each.

(To visit some of the souvenir shops, one must cross the four-lane state highway that divides South of the Border and brings the autos off the interstate into the heart of Alan Schafer's kingdom. Some thought has been given to building a pedestrian bridge, but for now it's a game of dodge-'em cars. I'm told that no one has been seriously injured making the dash.)

In a corner of one football-field-size souvenir store I hear a burst of giggles from behind a curtain of beads. I approach slowly to find a heavy-set woman, her face flushed, laughing at some coffee mugs. I separate the beads and see I am in the "adult" section of the store, where slightly risque treasures are displayed.

The woman is examining a shelf of mugs with drawings of lovers in different positions to represent the 12 signs of the zodiac.

"Oooooooh," she says to me playfully. "You better not come in here if you have a dirty mind!"

Then: "I better get out of here before I get arrested !"

That's sin, South of the Border-style.

The Border was built by beer. It began as a beer depot. Food came later. Then accommodations. When Alan Schafer returned home from college, he agreed to manage the family business if his father would agree to sell the marginally profitable family store and concentrate instead on the young but growing business of distributing beer. Today Schafer says his beer distributing company grosses about $40 million a year, compared to the Border's $15 million. Schafer's fleet of trucks service nearly half of South Carolina.

In the beginning, the local citizenry wasn't crazy about the beer joint Schafer started just below the border of a dry North Carolina county. To add some class to the place, Schafer added food. Eventually motel rooms came along, and since 1954 construction hasn't stopped at the Border.

The newest addition is a $1,500,000 giant tourist tower with a top shaped like a sombrero. Schafer paid cash for the tower (manager Holliday says that's the way Schafer likes to do business, that all bills are paid within 10 days of receipt). At the base of the tower is yet another souvenir shop; customers with receipts from purchases may ride to the top for free and overlook... what?

"At night you can see the lights of Lumberton and Columbia," Holliday says."In the day, well, a lot of folks have never seen corn or tobacco fields."

From the tower one can overlook the south and north exits from the interstate that feed cars into the Border. Legend has it that political clout delivered those exits, but Schafer says otherwise: "In '57, when Ike's administration first issued the interstate map, I went with Rep. [John] McMillan to see the Bureau of Public Roads. We had 60 rooms at that time, and I said, 'Should be expand or not?' Every map they had showed the interstate would cross the border right at our point, so we went ahead and expanded."

But the Chamber of Commerce in his own Dillon County, feeling Schafer was receiving special treatment, asked the highway department to move the interchange exit into North Carolina. Schafer pointed out that he had a couple of gas stations earning the state hundreds of thousands of dollars in tax revenue each year; move the exits into North Carolina, and that state would receive the tax bucks.

The ramps now lead into the Border. Most important are the ramps serving southbound traffic, because those cars contain the tourists Schafer best likes to entice.

"On the way down they eat steaks," he says, "but on the way up they eat sandwiches."

Schafer likes to make hard-headed, business-like statements like that, but he's an affable hard-head apparently having fun with the myth of Pedro he's built in the part of America where you see bumper stickers that read: "JESUS SAID IT. I BELIEVE IT. AND THAT SETTLES IT." His odd-man-out role in the South seems never far from his mind. For example, after a lengthy evening interview with Schafer, he sent a hastily typed memo to my motel room. He'd had another thought.

"In 1954," Schafer wrote, "we were admitted to what was then a mutual referral organization [of motel owners]... but within 18 months were asked to resign, which we did. The reason (never stated openly, but told us personally by the top brass) was that we accepted Negroes on an equal basis with anyone else who had the $$$. Of course, we were the first major motel/restaurant south of Washington who from the start always had an open door policy -- first come, first served. And also we checked only the color of their money, not their skins."

If Schafer is to continue to compete with the airlines for the tourist dollar, he knows he'll have to continue his mammoth ad campaign. His 1979 ad budget is $750,000 with 30 percent of that earmarked for billboards. Between 5 to 8 million postcards are mailed out each year from the Border.And millions of bumper stickers are plastered on the nation's fenders. Of course not every customer is a city slicker from the North looking for a one-night room.

Consider Steve and Terri Meacham, newlyweds who decided to honeymoon at the Border at the suggestion of the mother of the bride.

"I thought it was fabulous -- we'd recommend it to anybody," says Steve, a surveyor from Hamlet, N.C. He liked the artificial wood beams in the Presidential Suite. He explained to his bride the purpose of the bidet after he "looked up what it was." The couple "walked around, bought a little ceramic thing of a dog, an English bulldog, and some knickknacks like salt and pepper shakers." One night they drove the several miles into Dillon to see "Jaws II."

The new Mrs. Meacham had aleays slept on a bed with a mattress, but at South of the Border, well, memories of a different sort were made. On her honeymoon, within the shadow of the giant neon Pedro, Terri Meacham tried out the pride of the Presidential Suite: the king-sized waterbed with the black bedspread. Now, reports husband Steve, she wants one of her own. CAPTION: Picture 1, no Caption, Photographs by Bill Snead; Picture 2, Alan Schafer; Picture 3, So big it has its own ZIP code.Photographs by Bill Snead Picture 4, Everyone stops.; Picture 5, Meachams in a honeymoon suite.; Picture 6, $1.5 million sombrero with view.; Picture 7, Even the bags cost: 25 each.; Picture 8, A "pedro" guides a tourista.; Picture 9, Dodge 'em cars at Border crossing.