"I remember a woman in the neighborhood who was visited regularly by a German officer," says dramatist Dusan Jovanovic, summoning up his childhood in occupied Yugoslavia during World War II. "All the local women gossiped about her. She was a beautiful woman -- tall, dark, with a charming smile. I remember her once ordering me to clean the boots of that officer and my refusal to do so. I was very upset and resented her for that.

"I remember how a man was shot by Bulgarian agents. My mother had sent me to buy some bread. I was just coming out of a bakery . . . the man had hid behind a board which was leaning up against a wall and I caught his eye . . . and I understood that his eyes were begging me to keep quiet. I pretended not to see him. But just then an agent noticed him and the man started running. They fired. And they killed him 20 meters from me.

"Today, when we observe children's games, they differ greatly from the ones which we had as children. In games, a child imitates the surrounding world. I remember playing firing squads."

Such indelible images can make for lasting trauma. They can also make for theater, and Jovanovic chose to face them down in an unflinching drama, entitled "The Liberation of Skopje." Beginning Thursday, the Zagreb Theatre Company will bring the work to Washington for a 10-day engagement under the sponsorship of the Source Theatre. This is the company's first tour of the United States, but since its formation in 1978, as an alternative to the frequently stuffy state-subsidized theaters of Yugoslavia, it has gained an ever-widening reputation for innovation and daring. The company's initial venture outside its homeland -- to the 1981 Festival of Sydney -- was described by the Australian press as the "theatrical event of the year," and the adjectives filtering out of Denver last month, where the company participated in the World Theatre Festival, ranged from "harrowing" to "excruciatingly genuine."

Shunning traditional theatrical spaces, the 20-odd member company acts "Skopje" outdoors--in courtyards and public squares that emphasize the starkly quotidian nature of the play. In Sydney, the group performed before the imposing sandstone walls of the historic Darlinghurst Prison; in Chicago, in the shaded quiet of a churchyard. In Washington, the slightly derelict facade of the Apex Building at 7th and C streets NW has been deemed especially evocative. Spectators will literally follow the action of the play there, starting at the small adjoining plaza for the prologue, proceeding to a set of bleachers for part one, and then on to a second set of bleachers for the concluding portion. The actors speak Serbo-Croat, but the intensity of their emotions and the boldness of the direction apparently reduce the language barrier to minor dimensions.

"Skopje" (the capital of the province of Macedonia) consists simply of scenes from an occupation, linked with music by Bread and Salt, Yugoslavia's most successful rock band. But the scenes are not painted with the heroic strokes the Yugoslavian theater and cinema have usually reserved for the Resistance effort.

Instead, the chaotic horrors of war are depicted from the often-bewildered, often-terrified perspective of a 10-year-old boy, Zoran. His father is away, fighting with the underground forces. To replenish the skimpy larder, his mother, Lica, accedes to the sexual advances of a German officer. His uncle, Georgij, is incarcerated by the Gestapo, who beat the very speech out of him.

Zoran and his comrades play at interrogation games. His grandmother, who scavenges the streets of Skopje for cigarette butts, is taken to the hospital where she loses a gangrenous leg. A gypsy child shines a German officer's shoes. Bombs fall. A young Jewish girl practices the piano. The juxtaposition of scenes large and small -- some of them containing only a few words of dialogue -- traps war's absurdity like a gladiator's net. At the end, Zoran's father returns on a white horse. He does not understand the surrealistic words pouring out of the mouth of his traumatized son.

"Skopje" was first produced in 1978 in a 17th-century courtyard in Zagreb's baroque quarter, largely because its maverick director, Ljubisa Ristic, was determined to assert his independence from the official repertory theaters. When authorities refused him permission to erect a tent for performances, Ristic scoured the city for an existing backdrop, and the idea of what he calls "environmental theater in an urban setting" was born. It proved as revolutionary as the play's approach to World War II, raising official hackles at the same time it galvanized the younger theater-going population.

"We have a tradition of grandiose epics, gloryifying the efforts of the Resistance fighters, which was the very thing our production of 'Skopje' was debunking," explains Dragan Klajic, a Belgrade theater critic and the company's literary manager. "At first, the theater and political establishment objected to the play because it didn't have the traditional partisan hero who is beyond reproach and who defeats the ugly Nazis. I suppose Georgij is a hero in the sense that he survives torture without giving away his friends. But within his own family, he can behave in a horrible manner. And the German officer is a nice guy. He behaves with decency and warmth. He plays piano with the Jewish girl. He's as much a victim of the war as anyone else. By not showing the battlefield, but by concentrating on the civilian population and the dilemmas they faced every day in order to survive, 'Skopje' struck a new note in Yugoslavian theater."

The company further broke with tradition by taking "Skopje" to dozens of cities -- not only surviving on box-office revenues alone, but actually prospering along the way, although its ticket prices run two to three times higher than the state-funded theaters. Commented one Yugoslavian critic: "A bloody heap of war revolves before us. Its horror is in what happens between people and in man himself. Normal things become abnormal, and abnormal becomes normal. The world is shaken at its base. So is man." At the 1979 Novi Sad, Yugoslavia's prestigious national drama festival, "Skopje" ran off with most of the awards and clinched the company's reputation as the country's most adventuresome troupe.

To this day, the Zagreb Theatre Company continues to pay its own way in the marketplace (the current American tour is being financed largely out of the actors' pockets), but in the meantime, Klajic notes ironically, "Skopje" has entered the repertory of several of the country's official theaters.

Zoran: When will daddy come back?

Lica: When we are all free.

Zoran: When will we be free?

Lica: When Skopje is liberated.

Zoran: When will Skopje be liberated?

Lence: Soon.

Zoran: Who will liberate Skopje?

Georgij: Your father.

Zoran: What is liberty?

Lica: It is the opposite of slavery.

Zoran: What is slavery?

Georgij: When you can't go where you like, when you can't say what you think! When you can't do what you would like to do -- you do what others want you to do. That is slavery!

Zoran: Why is slavery?

Lica: You wouldn't understand.

Zoran: Why?

Lence: Because you've never been free yet.

Zoran: Have you ever been free?

Georgij: None of us have ever been free.

-- From part one of "The Liberation of Skopje"

Although the American theater has spawned its share of radical theater groups, few of them would appear to dig for the marrow quite so relentlessly as does the Zagreb Theatre Company. And those that do are usually relegated, by finances or circumstance, to a position on the fringe.

"Imagine, if you can, a company with Dustin Hoffman, Jane Fonda, Al Pacino and Ellen Burstyn doing highly charged political plays that are also highly artistic," says Klajic, searching for an American equivalent. "If we wanted to, we could bill ourselves as an all-star company in Yugoslavia."

The performers, mostly in their twenties and thirties, are bound in a loose federation, appearing in some, but not necessarily all of the productions. Many of them have prominent television and film careers going at the same time. Rade Serbedzija, who plays Georgij, is widely accepted as Yugoslavia's most popular actor, while Svetozar Cvetkovic, who is cast as an agent of the Buglarian secret police, scored recently in the film "Montenegro" as the raffish seducer of Susan Anspach. By the same token, the company also boasts the services of a 20-year-old gypsy shoeshine boy. When he's not playing the shoeshine boy in "Skopje," he plies his trade on the main square of Zagreb.

In each of the 10 major Yugoslavian cities it regularly visits -- the country is about the size of Wisconsin -- the company now has its own playing space and a back-up staff that handles ticket sales and publicity. Because it receives no government subsidies, it is free to tackle sensitive and controversial issues that are bypassed by the state theaters. "There is no censorship, and if you don't rely on the establishment financially, your maneuvering room is actually quite large," says Klajic. The company's version of "Hamlet" turned the Danish prince into a passionate independence fighter and Shakespeare's tragic musings into urgent reflections on covert operations, foreign subversion and the right to self-determination. Last December, the company's latest production, "Karamazovs," shattered yet another taboo by examining the plight of the Stalinist loyalists, who were incarcerated in a concentration camp in the Adriatic in 1948, after Tito engineered his country's break with the Soviet Union.

A storm of controversy greeted that drama. Condemned in some quarters as "subversive," praised in others as "political theater that still remains art," it was a hot ticket overnight. "Everyone knows what happened to the Stalinists," says Klajic. "They were interned in a gulag and exposed to a harsh re-education process, not by the police, but by their fellow inmates. That way, the police could claim they had nothing to do with it. Until this production, though, this was never a public issue in Yugoslavia. Our play doesn't try to exculpate; it tries to analyze the contradictions of a tragic set of circumstances."

Again, searching for an American equivalent, he says, "I suppose it would be something like an American troupe putting on a play about Roosevelt's internment of the Japanese in America during World War II." And having it turn into a big hit.

That the commercial American theater rarely tackles such fare is not lost on Klajic, who received his doctorate in dramatic literature and theater criticism from Yale University. "Except for a period in the 1930s -- with Odets and the Group Theater -- theater in America has usually come out of a tradition of entertainment. What seems to me to be a major mistake in the United States is that the people with the ideas, the imagination and the sense of adventure are used to thinking small. They're satisfied with the space on the fringe, which is handed to them by the commercial theater establishment. But if they are not marginal people, why should they accept marginal status? Here you see customers paying lots of money for dreadful things, and you wonder why they don't pay for something that would truly involve them. Trivia has the better deal here.

"What we hope to show is that an independent, highly artistic nonsubsidized theater company--a company that explores complicated questions and throws up an intellectual challenge--can be commercial. Not in the sense that it is making someone rich, but in the sense that it can survive on box-office and pay people decent wages. That, I think, is something that may not seem too believable to you."