The business lunch began quietly. But after the duck, as he was sipping wine and contemplating dessert, the client began to feel uneasy. His companion, a man he had been calling Alex and whose complicated last name he had forgotten, seemed to be more than just an insurance man. The reason for suspicion wasn't clear, perhaps the English accent, or the elegance, both low key. Alex's attentiveness was unusual. He asked good questions and remembered all the answers; his emphasis on serving a client seemed to echo a grace beyond salesmanship.

Finally the client leaned across the table and asked, as if reading a line from a fairy tale, "Who are you?" And before the answer came, he blurted it out: "Are you royalty?"

As in fairy tales, when the right question is asked, Alexander Karageorgevitch, currently of Fairfax County, Va., replied with the truth: yes, he is a prince of the blood royal--a crown prince, the only son and undisputed heir to Peter II, the late and last king of Yugoslavia. He is the only head of a royal house living in the United States.

His wife is Princess Maria da Gloria Orleans e Braganca, great-great-granddaughter of the last emperor of Brazil. England's Queen Elizabeth is his godmother and third cousin; Spain's King Juan Carlos is her first cousin. European royalty, on and off thrones, is their extended family whose members they spend weekends with.

"At times I wish there was no title and I was a nice simple person," Alexander says. "But then there are other times when I look on the title with pride."

"My parents never put it in our heads that we are special or different," Gloria says. "They told us to be proud of our ancestors but also that it is the past."

Alexander attended the wedding of the prince of Wales to Lady Diana as one of the family, a favorite relative. Gloria, pregnant with twins, stayed home in the States. Like Prince Charles, his friend since boarding school days at Gordonstoun in Scotland, Alexander has done a stint with the British military. For seven years, he was a professional soldier, specializing in tank warfare, intelligence and counterterrorism. He served in Northern Ireland, West Germany, Libya and Aden. Gloria, meanwhile, studied art in Madrid and Paris. They both speak some half-dozen languages.

In company with his British cousins, the prince is dedicated to the vigorous life. He exults in fast cars and deer hunting, sailing and travel, and was once the British army's ski champion. Unlike his cousins, however, he has no love for the minutiae of royal ritual. Attending Serbian Orthodox Church functions and presiding over endless ,emigr,e palavers bore him.

"I want to get on with it," he is in the habit of saying. Perhaps his is just a case of stiff upper lip, but he insists that he welcomes the necessity to earn his living, a detail his titled ancestors never had to face. Having inherited no vineyard on the Rhine or villa on the C.ote d'Azur, Alexander became a businessman to earn enough to live like a prince. But the entrepreneur in the family is his wife, who launched a company to manufacture furniture she designs "for young couples in small apartments who want to buy quality but can't afford antiques."

The Yugoslav throne was abolished four decades ago, when in one of the epic battles of World War II Tito's communist guerrillas triumphed over German Nazis and Italian Fascists, and eliminated the monarchist resistance. Brazil has been a republic for nearly a century, following the peaceful abdication of its last emperor. There are no crowns to claim. At 36, Alexander is a tough, uncomplaining ,emigr,e who has always lived in someone else's country and represses any lurking thought of what if. Gloria, 35, has neonever known exile and dismisses any interest in matters royal. But they do not escape their past.

"Rumor has it that you are a prince," said the receptionist when he arrived last December, transferred to the Washington office of the James Group Service Inc.

"That's right," he replied.

"What should I call you?"

"Alex. Just Alex."

America is the great leveler. That in this republic all men are born equal, or at least reborn equal, appeals to Mr. and Mrs. Karageorgevitch. They are determined to succeed in a country that provides no niche for royalty.

"I like to go into a company, and especially the one I work for, and be on a first-name basis with everybody," he says. "It's the person who counts and not the title. In England and France, there are many closed doors because of different accents and different backgrounds. I hate class differences. I believe that we are all on the same planet, and we should get on with it. Everybody has their qualities. In America, people can rise up through the ranks like express trains--even if they've got a very strange accent. A title in America is neither positive nor negative; it's the individual who achieves something."

And he has achieved. A specialist in group insurance, the prince earns more than $50,000 a year. "Once I got over the initial shock of working with royalty, I discovered a man extremely competent in our business," says Ed Bush, the prince's boss. Working with Alexander from day to day, Bush finds it easy to forget the differences in their backgrounds. But there are occasions to remind Bush that a prince is a prince, even if he is an insurance agent.

On a recent evening, the two walked into the Serbian Crown restaurant on Wisconsin Avenue, where they were surprised to discover the Karageorgevitch coat of arms with its double-headed white eagle carved on the door, woven into a carpet and printed on the menus. Oil paintings on the walls portray Alexander's ancestors, all the way back to Kara George, founder of the dynasty and hero of the uprising that drove out the Turks and proclaimed an independent Serbia in 1804.

For a zealous monarchist like Alexander Markovic, owner of the Serbian Crown, the royal family is an extension of one's own family, its exemplar. Markovic himself was named after Prince Alexander's grandfather, Alexander I, who in 1924 declared himself king of the three South Slav, or Yugoslav, peoples: Serbs, Croatians and Slovenes. Alexander I was assassinated in 1934 by a Croatian hired by Mussolini, and Markovic, only 9 at the time, attended the funeral. In 1970, he flew from France to the United States to be present at the burial of Peter II, Alexander's father.

Markovic was 18 when as a lieutenant in the Yugoslav army he swore allegiance to King Peter. That oath was not lightly taken; he did not abandon his king even after Peter started drinking.

"A man is a human being and vulnerable," Markovic says. "But no wear and tear can convince me to deprecate someone I love. When I swear my allegiance, it's total--there are no degrees. I don't measure friendship and loyalty by degrees."

Tears welled up in Markovic's eyes when he realized that evening that one of his patrons was his prince, the rightful heir to the throne. He bowed and his wife Mirjana curtsied. They escorted their guests to their table. Then the restaurateur rushed to the cellar and emerged with a Ch.ateau Lafite Rothschild 1955 and a bottle of the finest Yugoslav plum brandy, a 10-year-old Monastirka slivovitz. First, a toast to King Peter's memory. Then other toasts: to the distant homeland, to the great and hospitable United States, to the glory of the Karageorgevitch dynasty, to the free West, to a better world. The main dish was rack of lamb, grilled the Serbian way--a feast fit for a king.

"It's all on the house," the owner insisted. "It cannot be otherwise." And in parting, he hugged and kissed his prince.

To commoners, royalty offers a holiday from the humdrum. A king and a queen are always on stage, and a kingdom is a nonstop opera of tearful abdications and triumphant returns, with a cast of heroes and usurpers, pretenders and true sons. Compared with throwaway presidents of republics or the ersatz royalty of dictatorships, a dynasty offers human continuity--history is fable, and genealogy is destiny.

A king is a king as long as he has subjects declaring their fealty. Alexander reigns sovereign in Serbian restaurants and ,emigr,e living rooms. "I wouldn't think of calling him anything but 'your royal highness,'" says Markovic. "He is my king. He has a steadfastness, that Karageorgevitch granite, the royal touch."

"Dinner at the Serbian Crown was a bit overwhelming," the prince says, both pleased and embarrassed. "But I am used to it. I am vaccinated. And the food was delicious --I love Serbian food. But the slivovitz is wicked stuff--I can't get used to it. It makes me burp for three days."

A crown prince is not just himself, but an idea, a piece of dynastic heritage. The insurance man slips into his princely robes ever so cautiously. He prefers workaday reality and its payoffs to the contemplation of what might be. He has declined suggestions that he declare himself King Alexander II.

"There will be no crowning whatsoever," he says, his voice rising. "I am not to be crowned in exile. To be a king of what?"

Like other Yugoslav monarchists, Markovic would like to see Alexander involved in politics and lobby American policymakers on issues affecting Yugoslavia. He would not say it directly to the prince, but he is saddened by Alexander's clumsiness in the native tongue, Serbo-Croatian. "He knows all the wrong languages," Markovic says with a sigh, "or, rather, he doesn't know the one language he must know. He can't hope to lead the country and then acquire the language."

"I speak five languages," his prince counters. "One more or one less doesn't matter. Besides, Serbo-Croatian is in my blood--I'll pick it up in no time when I need it. Actually, not knowing the language has been a godsend--it kept me out of the dangers of emigre politics."

Alexander visualizes his return to Yugoslavia as a private citizen working to attract Western business--provided opposition parties are allowed. But he doesn't want to engage in what East European ,emigr,es call active politics, such as trying to get the U.S. Congress to issue a resolution demanding free elections in Yugoslavia.

Unlike other exiled royalty, Alexander maintains no court or secretariat. His only courtier is a Milwaukee friend, an engineer named Branko Terzich who dispatches a few hundred letters a year in Serbo-Croatian on the prince's behalf. Terzich delights in his double life: sometimes he is a public service commissioner for the state of Wisconsin, elected last fall on the Republican ticket; sometimes he is the crown prince's adjutant.

The royal letterhead, which originated with King Peter, is printed in two versions. One says, "The Chancellery of the Royal House of Yugoslavia" in Serbo-Croatian, the other, "The Administrative Chamber of the Royal House of Yugoslavia" in French. Most of the letters Terzich responds to for his prince are invitations to functions of the Serbian Orthodox Church or ,emigr,e meetings. There are also political proposals, which Alexander describes, with a sigh, as "full of ideas, but none of them practical."

Deep inside Alexander retains an ambivalence whether he wants to reach for influence and power, or remain in semi-anonymity," says Professor Nicholas Moravchevich of the University of Illinois, a friend from Alexander's four years in Chicago.

Alexander has two calling cards: "Alexander Karageorgevitch, assistant vice president, James Company" and "Prince Alexander of Jugoslavia" (the British spelling of Yugoslavia).

"In fact, I am cheating," he says of the second card. "I hope that the title may help me in some instances. But that's unfair to too many people," he adds with a grimace and throws his hands up in despair.

"Usually I have to reintroduce myself," he says, "I find myself going into a sort of Reader's Digest history on what went on in World War II. Many ask: How come I am here, in America? My response to that is that I am here to earn a living, in a great country." He carries a British passport and a U.S. immigration card, and he plans to become a U.S. citizen.

When Alexander was born, in 1945, in London's famed Claridge's, the hotel was declared Yugoslav territory. His father, King Peter II, and his mother, Queen Alexandra, were great- great-grandchildren of England's Queen Victoria and thus cousins of the reigning monarch, George VI. Yugoslav royalists believed that the birth of a son was a good sign. They hoped that Alexander--held at the baptismal font by his godmother, Princess Elizabeth, heir to the English throne-- would help to reverse the tide that had been against the Karageorgevitch dynasty.

Peter was 18 when he fled Yugoslavia after the German invasion in 1941. Resistance was first organized by Gen. Drazha Mihailovitch, the king's man, and Yugoslavia's mountains offered a good terrain for a courageous people determined to fight an occupying army. The Allies recognized Peter as head of state; his was one of several governments-in- exile. But, Britain gradually shifted its military and political support to the Communists led by Josip Broz, called Tito in the underground. The justification was that Tito's men killed more Germans and constituted a force stronger than the royalists. Despite discreet lobbying by King Peter's British cousins, his Britannic majesty's prime minister, Winston Spencer Churchill, grandson of the duke of Marlborough, chose to preside over the liquidation of the Yugoslav monarchy.

So the dethroned Peter traveled to London and Paris, to Washington and New York, looking for political support and a way to earn a living. He soon ran out of money and sympathy; he went to work for businessmen who tried to capitalize on his title. He couldn't decide which ,emigr,e faction to side with. His marriage collapsed, and he took to drink.

Gone were the days when FDR and Churchill dined with him. They had a habit of putting their arms around his shoulders, calling him a gallant young friend and ally. They always promised to do for him all that they could. But they didn't keep their promises.

In 1970, Peter died in Denver of cirrhosis of the liver. The obituaries noted that he was the only king ever to die in the United States.

Talking about the fall of the House of Karageorgevitch, Alexander sounds as detached as a historian. Britain exploited the best, the most noble qualities of the Yugoslav people, he says without anger. He says that in Churchill's shoes, he might have done the same. And he blames Yugoslav infighting for what happened.

He is frustrated that the Yugoslav diaspora today is still divided: Serbs and Croatians still sometimes shoot each other on the streets of San Francisco and Dusseldorf; the Serbian Orthodox Church is split between those who acknowledge the authority of the patriarch of Belgrade and those who consider him a communist tool. There is no way to tell how many of the 4 million Yugoslavs in the West (up to 1 million of them in the United States) favor a restoration of the monarchy. Among the 21 million Yugoslavs at home, the Karageorgevitch name is history, and monarchy has little appeal.

Those who know Alexander suspect that he broods privately--how could he not? His father's friends helped to dismantle the monarchy. Yugoslavia ought to be his country-- his. He reads all the books on Yugoslavia and World War II, and sometimes withdraws into a heavy silence.

Alexander prefers not to talk about his parents, and when he does, his father is "my poor father" and his mother is "a recluse in Venice--she hasn't been well for years." Unlike some other exiled royals, he won't bad-mouth his English cousins.

When in England, the queen invites him to dine with the family, and they exchange frequent letters. At Charles' wedding last year, Alexander was buoyed by the outpouring of popular emotion and the precision of the pageantry. "I loved every minute of it," he says. "But I kept thinking: Is this the last such ceremony?"

Alexander never saw much of his parents. First an Irish nanny took care of him. Then from the age of 8 on, he was sent off to boarding schools in Scotland, Switzerland and the United States. At 19 he joined the British army and rose to become a captain of the Queen's Royal Lancers.

He left the army after he got married, in 1972, because "the empire was getting too small and boring, and they kept sending you to the same places: Northern Ireland, Germany, maybe Hong Kong." He began his insurance career in his wife's native Brazil; five years ago the couple moved to the United States.

Gloria Orleans e Braganca and her sister Cristina are proprietors of Portobello, a furniture company they launched seven years ago in their native Petropolis, the mountain town where the Brazilian imperial family has maintained a summer retreat for more than 130 years.

"All the men in the family-- and I have four brothers-- laughed at us girls," Gloria says. "We didn't ask them for a penny. Now that business is fantastic, they are amazed. We accept no advice from them. Alexander sometimes criticizes us, but I tell him, 'Look, it's mine.'"

Gloria smiles tolerantly as she speaks of "all that royal nonsense. In Brazil, everybody knows my family, but it doesn't really make any difference. Petropolis, the city where we live, is named after our ancestor, Emperor Pedro. We live in a house across from the imperial palace, which my father gave to the state. We don't live off the past. In England, they still care about royalty. But in Brazil . . . oh, maybe it's the tropical weather, the easy way of life. Our parents taught us to achieve things by ourselves, not because of our titles."

As a newcomer in Brazil, Alexander was surprised by the honors accorded to the Orleans e Bragancas. His father-in-law Dom Pedro, the head of the house, is asked to preside over a table at state dinners, and people insist on addressing members of his family by their titles.

"My father is friends with all the politicians," Gloria says. "He deals in real estate. My mother is very Spanish and very proud of being Spanish."

Gloria is a lighthearted Brazilian with an easy laugh, attractive and stylish, and as tall as her husband, just under 6 feet. She talks about South American naive art and sales at Tysons Corner, about growing rare tropical plants indoors and her plans to sell locally the furniture she designs.

Alexander and Gloria play tennis together. He does some skiing, but she prefers skating. They play backgammon, and the loser goes to buy the groceries. She is a gourmet cook, Brazilian style, but with French and Spanish influence. He cooks also, following the recipes of Julia Child. His specialty: barbecued lamb smothered in mustard, with thyme and rosemary.

The Karageorgevitches have a steady stream of visiting relatives from Europe and Brazil. Evenings they read books--his interests are current affairs, world politics and spy novels; hers, art and historical fiction.

Alexander and Gloria hold hands in public and never cut into each other's word. When in company, they ask many questions and have a way of putting people at ease. They are a lively couple to have over for dinner.

They live in a rented four- bedroom rambler in Fairfax County. The focal point of their home is a collection of 19th-century French etchings of parrots, a present from Gloria's father who used to say that she "talks too much, just like a parrot."

Portraits of ancestors hang on the walls. There is an elaborate writing desk inherited from a grandmother, but most of the furniture is designed by Gloria and crafted in rosewood, cherry and other woods "with names I don't know in English," she says.

Gloria speaks English with a Brazilian accent. She grew up using French in the family and Portuguese outside the house, then perfected her Spanish at a boarding school in Spain.

Her parents are first cousins. "Oh yes, there have been too many cousin marriages among the Borb,ons," Gloria says, speaking of her mother's family, the royal house of Spain, which earlier ruled France under the name Bourbon. "Alexander was really worried and checked me out if I am right in the head."

Gloria and Alexander, fourth cousins, are both descendants of Pedro I who was both king of Portugal and emperor of Brazil in the 1820s. They met in Spain, at a party given by her aunt Isabelle, the countess of Paris, wife of the Orl,eans- Bourbon claimant to the French throne. It was love at first sight, they both say.

Their son Peter, born in Chicago, is only 2, but already understands English, French, Portuguese and Spanish. French and Portuguese are what his parents mainly speak; Spanish is the maid's language, and the English--that comes from Sesame Street. "Look at Peter's dark, fulminating eyes," Gloria says. "He is going to be a dictator."

The odds are better than even that like other immigrants, the Karageorgevitches will become Americanized. Alexander may one day preside over his company and Gloria seems slated to become a pillar of the PTA. They will display portraits of bemedaled ancestors; they will keep their dynastic secrets. Provided someone asks for it, they will talk about kingdoms that could have been. But their lives are not likely to be determined by the splendors and the agonies of the past. Perhaps for them the royal adventure is over.

But do fairy tales ever end? On Jan. 15 Gloria gave birth to twin boys, Philip and Alexander. Their christening will be in July, in Spain, in a mansion 30 miles west of Seville that has been in the Bourbon-Orl,eans family for generations and now is owned by Gloria's mother, Princess Esperanza. Gloria and Alexander were married there, and members of Gloria's extended family often spend vacations there. Gloria loves Villamanrique and its surrounding village of 3,000 souls. Alexander calls it "a magnificent, unspoiled spot."

The twins' godfather will be Greece's ex-King Constantine, Alexander's second cousin. The godmother will be Anne, duchess of Calabria, Gloria's first cousin. Anne's father is Henri, count of Paris, the Bourbon- Orl,eans claimant to the French throne, who was once eyed by Charles de Gaulle as his successor as president of the republic. Also among the prospective guests are Spain's king and queen--theirs is the only successful royal restoration in this century--and 50 other princes and princesses from reigning and nonreigning dynasties.

Three bishops of the Serbian Orthodox Church will officiate, two from the United States and one from Western Europe. Robed and crowned in the manner of Byzantine prelates, they will preside over the ceremony in the flagstone courtyard. Ritual calls for the baptizands' total immersion in water. "But our bishops are pragmatic," Alexander explains. "If they see that the children are uncomfortable, they might just sprinkle them with holy water."

Villamanrique, it is said, is haunted. It has an angry ghost with an eye patch, a man assassinated in the 17th century, who owned the oldest part of the building. He lives in the library, and Gloria remembers that her uncle Henri, the count, warned her and other children not to upset him. He has a habit of throwing things, Gloria says, and it's best to keep out of his way.

Then there are the ghosts from the 19th century when a French architect rebuilt the structure to look like an Andalusian villa. They are two old village women who visit only little children, gentle old women who tell bedtime stories. The children of the house reject the scoffing of those adults--Gloria's mother, for one--who declare that the old women do not exist. To the children, the ghosts are as solid as the rest of Villamanrique, which was built of local fieldstone and the finest Italian marble. The stories the old ghosts tell, Gloria says, are the very best.