If you ask her mother, Dixie Peterson, a resident of New York's artsy West Side, is "between jobs."

Others might refer to her situation as "being unemployed," but the former Wall Street researcher brushes aside such a negative connotation. She quit her job by choice three months ago and seems momentarily pleased to pursue outside interests -- sewing, museum hopping and entertaining.

Peterson's idea of a dinner party would raise more than a few East Side eyebrows, but her theory holds that entertaining doesn't have to be expensive to be fun. Her oft-repeated dinner parties began as a way not only to broaden her circle of friends, but more practically "to enable the guests and the hostess in particular to get a whole meal."

Call it West Side hospitality or the survival of the fittest.

"I plan a dinner with no budget but with foods that are cheap," explains Peterson, who lists items like chicken, tomatoes, pasta and rice as frequent dinner fare.

And when she and her friends tire of poultry?

"We alternate with spaghetti and chili," Peterson laughs.

There are no hard and fast rules to such gatherings, but it's usually assumed that whoever provides the setting gets out of the cooking. "Everyone brings things -- like, all of it," says the hostess. "They feed you at your own house." No one seems to mind that the "house" in question is a studio, a walk-up or an efficiency shared with roommates, pets or both. "We're not oblivious to appearance, but it's not a primary consideration.

"You can't worry about everything being nice. My table seats two, so I put a tablecloth on the floor and set the bread on top of that . . . then I set my tablecloth."

Peterson recalls the party where 12 guests were seated around a table and no two settings were alike. "This apartment had three rolling pins but no bowls -- and we were serving soup." The hostess improvised with custard cups and small mixing bowls.

Where artists, writers and other creative types gather, jobs are sure to come into the conversation, but Peterson remembers banning such discussion at her last affair. "Two of us had just quit our jobs," she explains.

Yet the rise and fall of fortune often dictates who brings what to a party. Says Peterson, "People with jobs bring wine. People without bring bread -- or just show up." She adds, "We're all poor, but we know who's poorer."

Peterson's favorite dish is one chicken stew, a filling and homey meal of chicken, vegetables and herbs that can easily be stretched to feed any number of guests by adding more carrots, tomatoes or new potatoes. Served with coarse dark brad and a glass of red wine, it's the perfect entree for family- style dinners.

Meat and wine costs can add up, but there are the less expensive vegetarian meals with sparkling cider to fall back on. And entertaining ,a la small budget needn't be limited to dinners. Consider a breakfast or brunch get- together. "I've told my friends to come for tea the next rainy Sunday," says Peterson, who plans to serve scones, biscuits and a variety of teas and jams. "On the West Side, we never have the 'right' party," she responds to a question about her more formal Yuppie associates, "but that's part of the charm." CHICKEN STEW

Serves 6 to 8 4-pound chicken, cut up 6 cups crushed, peeled tomatoes 6 cloves garlic, crushed 8 to 10 small new potatoes, quartered 5 medium carrots, sliced 2 teaspoons dried basil 3 bay leaves 2 teaspoons parsley 2 teaspoons tarragon 2 teaspoons oregano 5 or 6 cloves 1 teaspoon dill 10 peppercorns Salt to taste Generous dash of nutmeg 2 zucchini, halved and sliced into bite-size pieces

Place chicken in a large pot of boiling water and simmer (covered) for 30 minutes. Remove from heat and in a separate pot over low heat, combine tomatoes, garlic and potatoes and 1/2 cup chicken broth from the cooking chicken. Cover, but remember to stir occasionally. Meanwhile, remove a chicken piece with tongs and, working with chicken under cold water, pick meat off bones. (Discard skin.) Add to tomato mixture. Repeat with second piece of chicken and add carrots, seasonings and 1/2 cup broth if necessary. Add more chicken. Add zucchini and remaining chicken. Simmer covered over medium heat 15 to 20 minutes, or until vegetables are tender. Remove bay leaves before serving.

This is best served with coarse dark bread and a plain leafy salad.