There are times when a preacher knows his words may rock the house. On a Sunday in June two years ago, the Rev. John W. Dean walked to the pulpit of his seaside church in Rehoboth Beach understanding the importance of the hour. He gazed at the familiar faces before him. He felt strong. He did not pause to wonder who he might lose.

Dean had kept silent for years as gay vacationers flocked into the small Delaware resort town and some residents reacted bitterly. There was a former mayor who lamented the area's "gay problem" and bumper stickers that urged, "Let's Keep Rehoboth a Family Town." Several gay men were brutalized mere blocks from his front door.

The attack disturbed him profoundly, such a rupture in the calm he discovered when he moved to Rehoboth in the 1960s.

To him, to many people, this was a land of saltwater taffy and bumper cars, a place with tree-lined streets of summer bungalows and a boardwalk that cultivated Rockwellian images of summer life: children on carousel rides, families splashing in the surf, fireworks on the Fourth of July. But it was also bedrock America, rural and south of the Mason-Dixon line, in a region where the Bible Belt was not worlds away and neither was the Ku Klux Klan. In many ways, he could admit, it was an unlikely place to push the boundaries of social tolerance.

Dean was himself part of Rehoboth's old guard. He was the leader of Westminster Presbyterian Church, a father and grandfather with a marriage of 40 years and a red-brick Cape Cod home. He sat on civic committees, served as the judge of elections, was chaplain to the Rehoboth police.

In 1979, he had voted to ban gay men and lesbians from leadership roles in the Presbyterian Church. But as gay life flourished around him in Rehoboth, he grew more and more troubled about the idea of exclusion. And when the church asked him to lead a task force on homosexuality in 1995, he took the question deep into his heart and tried to reconcile his beliefs.

The minister pored over thick and sober books. He prayed to God. And on that June day, when his church was full, he stepped forward to deliver perhaps the longest-deliberated sermon of his career. He talked about the Bible and told a story of Philip, the apostle, in which he embraced all without sexual distinction.

Christians, he went on, his hazel eyes intent, his voice building, should accept God's people, gay or straight. "All," he said firmly, "will sit at the table of our Lord."

The congregation was utterly silent.

Later, when the service was ended and the preacher was standing in the doorway shaking hands and saying goodbyes, as he always did, he was embraced. Once. Then again. And again.

In a small town like Rehoboth Beach, social tolerance comes in a thousand personal reckonings -- disparate moments when something in a mind or heart is shifted, unlocked, reenvisioned. Some people regard the change with awe. For others, it is barely perceptible, unseen and largely unknown.

The preacher's stand was perhaps the most vocal reckoning here in the last decade, a bold declaration before a riveted congregation. But there have been other subtler changes, in many ways no less profound -- at police headquarters, at AIDS vigils, in business practices, in the humdrum of everyday life.

Taken together, they have made a difference. Ten years ago Rehoboth Beach was a town in the throes of the culture wars, divided into factions, split and distrustful. Now it is something else -- not exactly a hamlet of harmony, not at all, but a blend of worlds, a place of adjustment and accommodation and, at times, even changes of the heart.

The town is at this moment both what the old guard fought to preserve and what the gay community wanted to create -- a mix of small-town tradition and beach-town tolerance, a place where hand-holding men in sandals coexist with baby strollers and kiddie rides. Tension can still be found, but it is the get-along middle ground that draws the crowd.

While there are other gay-friendly sunspots on the Eastern Seaboard -- Provincetown, Mass., Key West, Fla., Fire Island, N.Y. -- none have reconciled the clash of values in quite the same way.

Slowly, through the course of a decade, many old divisions have worn away. The big threat now, in some minds anyway, comes from out of town, where chain stores and outlet malls have begun to clog roads and cramp Rehoboth's small-scale charm. "Now it's everyone against the outlets," says one straight businessman, only half-jokingly.

Rehoboth is just a square mile, with two small lakes, a firehouse, a town hall. It calls itself "the nation's summer capital," and it is proud of being oddly out of its time, a saltwater throwback with a bandstand, a Christmas parade and a skyline dominated by a red-orange sign proclaiming Dolle's, a local institution in boardwalk confections. People here are big on shade trees and down on high-rises; the cottages have screened porches.

For all of its traditionalism, Rehoboth is a hybrid, with the predictable T-shirt shops and ice-cream counters but a far more cosmopolitan tone. Rows of trendy shops beckon beside restaurants with serious cuisine: Fusion, Back Porch, La La Land, Chez La Mer, Celsius. There is live jazz, fine crystal and facial massage, just down the way from beach ball displays and piles of plastic sand shovels. The walk is never far to a cappuccino machine.

In large part, the sophisticated touches have arrived with the gaying of Rehoboth. In the last decade, there are more gay-owned businesses, more openly gay vacationers, bigger crowds on the gay stretch of the beach. But even so, Rehoboth is not a gay mecca. There are same-sex couples dancing in brightly painted bars, and the occasional drag queen strutting down the sidewalk. But the central shoreline, at Rehoboth Avenue, is a mob of children in water shoes and khaki-shorted parents loaded with beach gear and diaper bags.

When the tourists leave every fall, Rehoboth resumes its life as a small town, and that may have as much to do with its "maturing," as one city commissioner puts it, as anything else. At last count, 1,234 people stayed here year round, a mix of Eastern Shore natives and transplants from Washington, Baltimore, Philadelphia and New York. Their paths cross at the post office, in the hardware store, over coffee in Browseabout Books. "In a small town you don't have a choice -- you get to know people," says Bill Courville, a gay businessman. "And it's very hard once you get to know someone as a person to disparage them as a category."

Today, many people here acknowledge that gays and lesbians have made the town more vibrant. They have poured money into Rehoboth and taken up its causes -- helping to expand the library, build a school playground, create a film festival. "It wasn't the invasion of the Visigoths," says Brian Levin, an academic who studies social attitudes and has watched the changes unfold. "They happened to be nice, cultured people."

In a resort so small and so financially dependent on the brief months of summer, social calm has always had a compelling economic logic. "Is it enlightenment?" asks Clint Vance, owner of a local spa and store. "Honestly? Honestly? It's money. I'd like to not be pessimistic about this. But I know, I know, it's money."

Almost without exception, the restaurants and bars here describe themselves as mixed -- neither gay nor straight -- even if they draw more of one crowd. Says one owner: "Nothing else makes economic sense."

Ten years ago, Cynthia McMahon recalls, her parents and their friends would fuss about gays "changing our town." Like most people, McMahon cannot pinpoint when the worry began to wane. Or precisely why. "They see their property values going up," she speculates.

Then again, she adds, there is the power of simple exposure that a small town brings. Her father, a plumber, used to look alarmed when he got work in a gay home. Now, she says, he waves off arched eyebrows and bad jokes. "They're nice people," he retorts.

Perhaps the best barometer of the change is John Hughes, a one-time mayor who is tanned and athletic at 57 and distinctively free-speaking in a town where people watch their words. It was Hughes who once gave life to fears that had only been whispered, by warning, as mayor in 1985, that "gays are advertising Rehoboth as Fire Island South."

"Rehoboth is a family place. The average citizen is not yet ready for two guys holding hands and kissing on the streets," Hughes insisted to reporters, attracting national press. "I don't give a damn what the Constitution says. It's still a visual shock." He complained: "There is hard-core sexuality going on in the dunes."

Fourteen summers later, Rehoboth is gayer, but not in the way Hughes once imagined.

"My dire predictions have not come true," he admits, sitting in the cedar-shingle home that his father bought in the 1930s, still heated with a wood-burning stove. Hughes is 6 feet 6, a competitive volleyball player with a Marine haircut who has beach life in his blood and works as director of soil and water conservation for the state of Delaware. His earlier remarks, he now says, reflected the anxieties of the 1980s -- nationally and among the homeowners and cocktail party set of Old Rehoboth -- about promiscuity in gay bathhouses, about the danger of AIDS, about drug use in the nightclub scene, about what Hughes calls gay proselytizing. "We saw a tendency toward what we saw as a gay takeover . . . to make it a gay resort," he says. "They perceived us as paranoid, homophobic. We perceived them as a threat to a lifestyle we cherished."

Today, his worries are not focused on new gay neighbors, but on newcomers who bulldoze huge trees and old houses to rebuild as large as possible. Pointing to a big boxy house nearby, he laments, "I came home one day and all 36 trees were gone."

Sexual gestures still unsettle him, he admits, like men French-kissing in public. He adds: "I'm shocked and spellbound to see a guy in drag with a thong rear-end walking down the boardwalk."

Like many in town, Hughes worries about how his comments will sound. Candor is tough when it comes to social attitudes, he says, because "anything less than complete enthusiasm can be taken as a total insult."

The anti-gay "family town" bumper sticker his car once sported is long gone. The woman he has since married once worked at the restaurant that opened Rehoboth's first openly gay bar and is, as he puts it, "Miss Tolerance." Now, he says with a self-amused smile, "I would put a bumper sticker on my car, if they made one, that said, `Keep Rehoboth a Diverse Town.' "

Rehoboth, he says, now "seems to have a niche for just about anybody. I think we've learned they pose no threat to us, and I think they've learned they don't need to take over." Gay residents have helped turn the beach resort "into a town of smart shops and restaurants with pretensions," he says. "I spent $42 on cheese yesterday."

It all began in 1981,when a highbrow restaurant called the Blue Moon opened the first bar in Rehoboth where gay men socialized in full public view. "It was a milestone," recalls one gay resident. "Gay life spilled out on the streets of central Rehoboth."

The clash of cultures had started, and it only grew. On the beach, gay sunbathers who had always hauled their chairs and coolers to an unincorporated patch of sand south of town -- and out of sight -- decided in 1983 to stop hiding. They resettled beside the south end of Rehoboth's mile-long boardwalk, creating what they would fondly call Poodle Beach.

Not long afterward, Hughes made headlines with his hostile remarks. Graffiti were scrawled on a building at the town's edge: "Death to Fags." Drexel Davison, now a prominent businessman, recalls being arrested in a traffic stop and taken to the police station, where a dispatcher eyed him and called out: "Look at this faggot." In 1988, a disco named the Strand opened in the center of town, in an old movie theater. As many as 700 people, mostly gay, danced under pulsing lights and mirrored globes into the wee hours. The club sought a liquor license, and the town's powerful homeowners group waged war about noise, traffic and parking.

Tempers blazed at town meetings. "These bars are catering to homosexuals," some said in heated tones. Businesses, worried that city fathers were restricting growth, joined the fight. A petition was circulated. Finally a public vote was taken on the question of banning bars and clubs altogether, except those that were part of a restaurant.

The homeowners triumphed; the bar ban passed. Several weeks later, 60 state troopers raided the Strand in a drug bust, arresting six people. Its owners felt they had been targeted. Still, the Strand went on, with no liquor but big crowds after midnight.

Which is how Steve Elkins arrived in Rehoboth.

At 40 he had spent his career in Brooks Brothers suits, climbing the ladder in corporate America and, at one point, serving as an administrative assistant in the Carter White House. He had just left a job as a district manager in computer sales when a friend asked him to move to Rehoboth to manage the Strand. Elkins and his longtime partner jumped at the chance -- they loved the little beach town, where they had summered for a decade.

A scant two weeks after arriving as a full-time resident, Elkins, at his boss's request, found himself at a lectern talking at the city's monthly board of commissioners meeting. Clean-cut and somewhat preppy-looking, he had never been an activist. He had never even told his previous employers he was gay. Yet here Elkins was essentially proclaiming it to the town.

"I'm here to tell you things are going to change," he declared.

"Sir, is that a threat?" one commissioner asked.

"No sir, a promise."

Times were tense all around. Down at the Blue Moon, windows were splattered with eggs. Vandals invaded the premises and ripped fixtures from the walls one evening. More routinely, insults were screamed from passing cars. With its openly gay bar and open French doors, the Blue Moon was a sitting target.

In July 1991, one gay swimmer's indiscretion turned into what many called "the riots." The trouble started when a man in the ocean at Poodle Beach parted with his trunks. Panicked lifeguards called police. Two officers showed up. As they started to arrest the swimmer, sunbathers circled around. Tempers flared. When police ordered part of Poodle Beach closed, many refused to leave. In the defiance that followed, four other gay men were arrested -- and some accused a police officer of calling them "faggots."

The charges were later dropped. But a city commissioner used the occasion to declare his outrage about behavior at the gay beach: "I have seen many displays of private body parts by both males and females, seen sand model representations of genitalia and have heard uncalled-for remarks by males made to people passing by."

Later that summer, after a car of teenagers shouted slurs at a gay man walking home from work, gay leaders went to the city commissioners. Rehoboth, like many small towns, generally pursued minor infractions with zeal. Why wasn't it doing more to crack down on gay bashing?

Mayor Sam Cooper told them harassment laws were in the hands of the state. "We were dismissed," Elkins recalls.

Then, on a pleasant May weekend in 1993, four gay men sat on a wooden bench on the south boardwalk, near Poodle Beach. They were visiting from the Eastern Shore of Virginia, talking among themselves after an evening of dinner and drinks. Several hours after midnight, five young men drifted by and made some slurs. They returned a few minutes later, wielding an aluminum baseball bat and wine bottles. In the mayhem that followed, they cracked open one man's skull.

"It shattered his skull in little fragments," recalls a friend who was with him that night and who also was beaten. "He could not speak to us, he could not move his arms, he could not walk."

Police arrested five suspects -- four of them teenagers -- and booked them for a variety of crimes, including second-degree assault and conspiracy, and weapon charges.

There had been other crimes against gays in Rehoboth Beach, but none this severe.

John Dean, the Presbyterian minister, recalls hearing the news and rushing to the scene. By then the victims were gone. In the dark of the night, he stood on the empty boardwalk, as waves lapped onto the shore, wondering what had happened to Rehoboth.

Six months later, on a blustery December day, came an early sign of a turning tide. The tourists were gone and Rehoboth was a small town again. It was World AIDS Day, a solemn occasion in a county where 90 people were living with AIDS and more than 60 lives had been claimed.

Elkins had asked the mayor for a letter of city support to read to the expected crowd. No letter had come. So Elkins called on Cooper at home, where he was decorating his outdoor 45-foot Christmas tree, a local landmark with 4,300 glowing lights. Elkins brought the mayor a draft letter to consider.

Cooper signed it, calling it "very nice."

Later that night, as some 300 people crowded around the town's bandstand with flickering white candles to remember friends, relatives and neighbors, Elkins read the mayoral missive. Some people were stunned.

Not long afterward, there was the singular effect of Randy Weaver.

On Good Friday in 1994, Weaver walked into Epworth United Methodist Church to take part in an evening service. He was 32 then, with dark eyes and an openness that made people feel close to him. That night, Weaver went to the communion rail and broke down.

Two friends escorted him out of the church. As others left shortly afterward, they were touched by what they saw in the courtyard -- two men steadying an anguished soul. They soon learned Weaver had AIDS and was dying.

"It was really the changing point in our lives," says Marilyn Cox, 60, who went home with her husband and began a process of examining why they had harshly judged gays and lesbians. "This was the beginning of a process for us to learn to respect other people and respect the decisions they make."

The Epworth congregation was situated right on Baltimore Avenue, near where Rehoboth began as a Methodist camp meeting ground; it is now in the heart of the gay community. Perhaps it was the most fitting place for signs of a transformation.

In the months that followed, Weaver's deteriorating health became a collective worry, as gay and straight church members helped care for him. At the same time, the Epworth congregation, the town's largest, concluded it would open its doors to all.

Later that year Elkins was walking past the Rehoboth Beach Convention Center when he saw another glimmer of change. Just off the main tree-lined avenue of Rehoboth, the '60s-era facility is a crossroads of small-town civic life -- where little girls promenade in frilly dresses every Easter, women in evening gowns vie for the Miss Delaware crown and spaghetti dinners are served up to honor citizens of the year.

On this sweltering August day a huge sign provided the usual welcome to visitors. But on the marquee below were large block letters announcing: "SunDance '94." It was the first gay event held in a town facility, and Rehoboth was broadcasting it for all the world to see.

Elkins blinked, went home and got his camera. "We have arrived," he thought.

Elkins had been working toward this moment. Several years before, he and his longtime partner, Murray Archibald, had founded an organization called Create A More Positive [CAMP] Rehoboth, with a mission to lessen tensions and bring gays and lesbians into the fold of the larger town. Not to take over Rehoboth Beach. Become part of it.

Every two weeks in the summer, they published a newsletter called Letters From CAMP Rehoboth. The first issue was four pages. By 1995, so many business wanted to advertise and so many press releases streamed in that Letters From CAMP was 32 pages. That summer Elkins had a chance meeting on the street with Evelyn Thoroughgood, the unofficial town historian and a guardian of Old Rehoboth, with her patrician manners, her pile of soft white hair, her classic pearls. She was in her seventies, a fourth-generation resident.

"When is that newsletter you publish coming out again?" she inquired. Elkins was surprised Thoroughgood knew who he was, doubly surprised that she was reading Letters From CAMP.

The next year came another sign. Cooper was up for reelection as mayor and knocking on doors to ask for votes. He knocked at the home of Elkins and Archibald. It was a gesture of recognition that had not come before.

In the summer of 1997, the Delaware legislature passed a hate-crimes bill that extended protections to gays, and Gov. Thomas Carper came to Rehoboth to sign it into law. It was a clear nod to the town's large gay community and its vested interest.

It also solidified what was already happening. The bar manager at the Blue Moon noticed that when people yelled insults from car windows, nine times out of 10 they would be stopped by the cops. Gay men and lesbians had begun to feel police efforts were tipping in their direction.

The watchfulness of a small town seemed to be expanding.

On a hot night in spring, Creig W. Doyle's newest police officers are packed into a stuffy classroom on the second floor of the firehouse. Here, a few blocks from the revelry of the beach, the police chief is teaching his troops about hatred -- how it had come to Rehoboth in the past, how it will not be tolerated again.

He starts by handing them booklets on the law. Twenty-two well-scrubbed men and women -- most of them dressed in T-shirts and blue jeans and looking young enough to remember their high school locker numbers -- leaf through pages of dense legal language. Doyle flicks on a movie of five hate-crime cases, one featuring a gay man.

Several recruits sleepily close their eyes.

"Why do we have this training?!" Doyle booms as the movie ends. "Because it happens right here in Rehoboth." The tempo rises as he shows slides of newspaper stories that detail crimes in town. In the early days, he concedes, "the gay and lesbian community weren't really too sure about us." Then he asks Steve Elkins to come forward.

It is the eighth year Elkins has been part of police sensitivity training. The first year had its rocky moments, like when an officer vented about the "special treatment" he said gays were demanding.

Tonight, though, is different. Just two questions come from the sea of fresh faces. How do gays feel about police in Rehoboth? What can police officers do to "become more enlightened"?

Elkins gives his pitch and tells two stories. In one, a police officer is whistled at by gay men. His advice: Ignore them or whistle back. In the other, a gay man grabs an officer's butt. His advice: Book him.

The recruits expect no problems. "I talked to a gay couple the other day and it didn't bother me," one says. From another: "After a while it's one of those common things, like a stop sign you see." They agree that if they have a problem dealing with homosexuality, they should not be working in Rehoboth. "Everybody knows that about Rehoboth," says a third recruit.

Before recruits ever get to this session, each has been surveyed by Chief Doyle for signs of bias. If he detects it, he does not hire that person for the force -- 17 year-round officers and 32 more in the summer.

Doyle, 51, is a no-nonsense cop who practices 1990s ideas about community policing. He knows that keeping the peace in his town means dealing with all groups. "If I had a large Vietnamese community, or a large Middle Eastern community, I'd do the same thing," he says. A thin, wiry man with glasses, Doyle took the helm nearly a decade ago after spending 21 years on the District of Columbia police force. His critics complain that in his zeal to ensure small-town order he sometimes goes overboard. But Doyle gets mostly good marks on gay issues.

Early on, he met with gay business owners. After the uprising on Poodle Beach, he met with gay community leaders. The next spring, he launched sensitivity training. A year later, he beefed up boardwalk patrols after the 1993 gang beating that left the gay tourist with brain damage. There have been episodes of trouble along the way, like the year police specifically cracked down on noise violations in the heart of the gay community.

But over time, many talk about a more evenhanded police force that does not single out gay residents. "It's as calm as you could ever hope for," says Elkins. Traversing the broad swath of sand that is Poodle Beach, he adds: "The gay community is not without fault. It's funny how people will go to a resort area and do what they wouldn't do in their own neighborhood."

One sign of smoother police-gay relations occurred on the July 4th weekend last summer, when Rehoboth was filled with 40,000 visitors. Police raided a lesbian gift shop, for selling adult sex toys without a proper license. They marched its owners into the street in handcuffs.

"It would have never come to the attention of the city if two gay men had not approached a city employee and reported it," says Doyle. "They said, `Don't you have a law against this? We don't think it belongs in Rehoboth.' "

One of the shop's owners says she believes the police targeted her shop to draw a line. "It was absolutely directed toward us because we were lesbians," says Maxine Kroll. "The powers that be wanted to let it be known: Don't let anyone pull this again. It's okay to have gays in town, but not too vocal. They want gays to be invisible."

But many in gay Rehoboth didn't see it that way. "They didn't have the right permit," Elkins says flatly. "This was not any civil rights issue."

In the end, police took little heat -- the store was deemed to have flouted the rules of small-town life. "You can't do a store like that within the town limits," says a lesbian businesswoman. The shop was "nice and upscale" but it was situated next to a restaurant where families gather for steamed crabs and shrimp. "The people I talked to said, `Hey, she knew this was going to happen.' "

When Rehoboth needs a Santa Claus for its beloved "Hometown Christmas Parade," local firefighters turn to Dave Ackerman. Ackerman is big and jolly and round in the middle -- a natural for the job. He also happens to be gay.

Ackerman has been the twinkling face of Christmas every year since 1994, sitting next to the mayor on an antique red firetruck as the mayor steers through the streets of town. Afterward, children line up to sit on his knee and whisper their wishes, as firefighters serve up hot chocolate and homemade cookies.

"It's a real testimony to the spirit of the town," says Ackerman. "Sometimes I kid the guys at the fire department: Where else but Rehoboth would you have a gay Santa?"

The same sort of thought occurred to Fay Jacobs recently when she and her partner celebrated their 17th anniversary. They dined in a trendy Rehoboth restaurant. After a memorable meal, the waiter appeared with a candle-lighted dessert and announced the occasion to the dining room. There was a loud ripple of applause. A graying straight couple nearby cheered them, Jacobs says.

Jacobs is the new executive director of Rehoboth Beach Main Street Inc., which promotes downtown business. While Jacobs has made a career in such work, her friends were surprised nonetheless when she was hired because she is also a popular lesbian columnist for Letters From CAMP. Her interviewers took the column as a plus -- it tends to be upbeat about life in the town.

Drexel Davison, the prosperous owner of a Rehoboth hair salon, blurred the old divisions from the other side earlier this year when he decided to give away some of his time and profit. He started with Rehoboth's only public school, where an effort to raise $60,000 for a new playground was floundering. Davison led an effort to raise the money in 60 days -- and did it.

"I went to spaghetti dinners, I went to PTA meetings. As a gay man, I'd never done these things before," he says. "I give a lot of credit to these parents who allowed me in. It wouldn't have happened in the Bible Belt."

In another town, a gay newsletter like Letters From CAMP might not be what it is today: a biweekly magazine, 96 pages during its July 4th issue, thick with advertisements for cars and homes and health clubs. Tourists read it. Locals read it. Recently a heterosexual teacher from the local high school penned a column. Last year the editors turned down an ad targeted at gay men, saying it had a negative message.

In the end, gays have embraced the notion of Rehoboth as a family town -- so long as they are part of the family. "We weren't trying to create a Key West or a Provincetown or a Fire Island," Elkins says firmly. "I love those places, but I love Rehoboth for what it is. It's a family town. We just want full acceptance that there are different types of families."

Not everything in town is as diverse. Gays still tend to sunbathe separately on the beach because, as one gay man puts it, "everybody likes their own space." Late on Saturdays, the bar at Cloud 9 tends to be gay, while Arena's is mostly straight. The happy hour at Blue Moon is a gay classic.

Sociologists say one measure of tolerance in a town like Rehoboth is the degree to which gay men and lesbians feel freedom of expression.

Rehoboth is clearly more conservative than many gay-friendly resorts -- more "subtly gay," says one gay guest-house owner. Some find it stifling. "I would like to see more openness, more people being able to hold hands," says one gay summer resident. "I think people restrain themselves because it is conservative."

Still, there are theme parties at gay beach houses every summer weekend; a drag volleyball tournament at Labor Day; three major gay events at the convention center each year; a second gay publication in town. The gay community has become "more layered," says one longtime gay businessman.

The Renegade, just outside Rehoboth, hit its 20-year anniversary this summer as a popular nightspot for gay vacationers. Even so, the Renegade's evening dinner theater crowd is almost half straight, its manager says. "You can't be just gay or just straight," he says. "You won't make it. You have to cater toward everyone."

There are still people here who resent the gay influx and say, as one homeowner who lives near the gay beach recently did: "There should be migration, in reverse." A Rehoboth commissioner says he hears some grousing when gay-owned businesses open. "Well, so what?" he replies. "And your proposal is?"

But after two decades of change, gay life in Rehoboth is "an accepted fact," says Evelyn Thoroughgood, whose dining-room table is piled with yellowing newspaper clippings one recent day. "It's like a square dance; everyone stays in their own corner and at the right moment everyone comes out and dances in the middle."

In this more peaceful mingling, some vacationers see the resort of the future. As Wayne Whiston of Our World, an international gay and lesbian travel magazine, puts it: "You can go from Ohio to Rehoboth and not get shocked."

Such middle ground sentiments infuse the politics, too. In the city's August 14 election, Gary Trosclair, an openly gay businessman, made a bid for a seat on the board of commissioners. But he made clear he was running on his credentials and his issues -- timely trash pickup, parking solutions, beach replenishment -- and not on a gay platform.

In the end, Trosclair lost, leaving political change for another time.

Not long ago, there came a late-

arriving chapter in the tale of the Strand nightclub and the battle it sparked. Two classic pizza places in town -- Nicola's and Grotto's -- wanted to expand, but could not because of laws that harked back to the controversy.

In the furor over the Strand, the city had voted to ban new bars altogether. In the same crowd-stopping spirit, it had voted a few years later to limit the size of restaurants that serve alcohol. Last spring, the two pizzerias asked for exceptions from that law -- and were turned down.

Plenty of people, gay and straight, disagreed with the ruling. But Steve Elkins found himself rethinking the history of the Strand. "In retrospect," he says, "I think it was as much a growth issue as a gay issue."

In the years since he first arrived here, Elkins has reflected on his own history, too. "I understand there's a lot more to building community than walking in and saying, `This is the way things should be done.' " He says he's learned the value of collaboration, and of not judging others too harshly. "Everybody comes to this situation with a different set of life experiences."

In retrospect, Cooper, the mayor, sees some things differently, too. He is a beefy man of 47, who owns and manages property and spends much of his free time in the brown-paneled mayor's office. He lives in a house built by his grandfather, a four-square with a wraparound porch, and he is a conservative sort, a man comfortable with policy and rules; he describes himself as an introvert.

When asked about the town's transformation, he pauses for a long while before answering. "I think there's a change of heart on both sides," he says, slowly. "I think the townspeople are more accommodating of it and I think the gays have decided they don't need to take over the town."

But Cooper still finds the subject difficult. "The sum total of Rehoboth is not the gay issue," he says. "To focus on that is to detract from the really great parts of Rehoboth." He mentions the clean beach, the boardwalk, the 18-ride Funland, the trees, even the elevation. What about the town's ability to overcome divisions? "If I had to be proud of something, it wouldn't be that. I would cite something more universal."

Cooper talks fondly about the years when people dressed up to stroll on the boardwalk and thinks it is not a bad idea to create a town distinguished by traditionalism. "I hope anybody's assessment of Rehoboth doesn't come down to the gay-straight thing because there's a lot more here, and we're no different than the rest of the country."

The Rev. John W. Dean

is looking back, too, remembering the sermon he gave two years ago on homosexuality and the reaction to it. He sits in a leather recliner in the den of his home, which is lined with books and piled with toys that belong to his grandchildren. His wife is cooking dinner.

In his congregation, he says, there were people who said he was brave or that he had given them something to think about. But some families left the church without so much as a word and never came back. "That's what hurt the most," he says.

The message of the sermon surprised his wife completely; it was the first real glimpse of how much his thinking had changed. At his regular lunch group, one friend made a point for months of inquiring about Dean's sexual orientation. People in town asked him how he would like it if his son were influenced by gay men. And how did he like overt sexual behavior on the beach? "I'm not fond of overt heterosexual behavior either," was the response he gave to more people than he can remember.

His sermon, as always, was carried on a local radio station, and he got letters from people he didn't know, telling him he clearly didn't understand the Bible and that his ideas were terribly, woefully wrong.

Dean and his church task force reported to a local presbytery of 55 churches in 1997, recommending a new policy of including gay men and lesbians in the church's ordained posts, as elders, deacons and ministers. The presbytery voted overwhelmingly in support, but the policy change ultimately lost out within the national church, and so the ban continued.

But Dean says he has no doubts about his own stand. It's not what he learned growing up, not a belief he held fully until he was 63 years old. But the preacher believes it. Beyond that, he knows it mattered.

On the day of Dean's sermon, three people telephoned Steve Elkins to tell him about it -- two gay, one straight. They spoke with excitement. On this day, at least, there was no need to search for small omens. Change had come, certainly, unmistakably, and it was reverberating through the streets of summer cottages, under the leafy shade trees, toward the shimmering stretch of sand that is Rehoboth's reason for being.

Donna St. George is a staff writer for The Post's Metro section.