In rehearsals for the film "The Missouri Breaks," Marlon Brando, who was being paid a then-unprecedented $1.5 million for a supporting role, approached director Arthur Penn and suggested that his character be "different, a serious study of the American Indian." To which Penn replid, "Gee, Marlon, not at these prices."

Which line springs to mind this Christmas, as "Dune" and "The Cotton Club" bring movies beyond the blockbuster into the age of the blockbuster art film. Both cost a staggering amount to produce: "Dune's" budget was $40 million (some estimates are yet higher); "Cotton Club's" $47 million. And both were directed by film school graduates (respectively, David Lynch of the American Film Institute and Francis Ford Coppola of UCLA) who, with a nod to entertainment, focus on concerns that are frankly avant-garde and artistic.

"Films, I believe, can be artistic and commercial at the same time," says Lynch. "I really think a film should be entertaining, but it can be a lot more than that as well, and that's where it gets into real nifty areas. I think Francis Coppola is a great director because he's the only guy in America who's doing something different with film."

Coppola returns the compliment, including Lynch among "those of us who like to make each movie an experiment. The Holy Grail is to do that and also be able to communicate to huge amounts of people, so that you can have an impact on the culture and also continue to make movies."

"Dune" and "Cotton Club" epitomize the struggle between the art and economics of moviemaking, between visionary directors and the studios and producers who hamstring them with conventional ideas of what an audience will demand, a conflict as old as movies themselves. Both show the strains a huge budget puts on the creative process, and the dilemma of a director who needs a large budget to achieve the epic scope the big screen cries out for, yet finds that budget metastasizing in accord with a logic entirely its own.

There's a freshness, a lack of self-consciousness to Lynch's movies -- he doesn't seem to create movies so much as dream them. It's this quality that makes "Dune" so original, unlike any of the sci-fi thrillers of the season. The style of sci-fi pastiche, inaugurated by "Star Wars" and "Star Trek," has inevitably degenerated into spoof. The typical science fiction movie today, like "Night of the Comet" or "Runaway," gets its mileage out of poking fun at the very genre it inhabits. Nobody's able to play it straight anymore.

Except for Lynch. "Dune" is the first serious science fiction movie since "2001," a movie of vivid images that seem to have sprung directly from Lynch's subconscious to the screen. In the person of Baron Harkonnen, villainy festers to the surface as obesity (like his sidekick, the Beast Rabban, he's a bloated sadist) and foul disease -- his face is a Whitman's Sampler for skin doctors, piebald with crusted ooze and tumorous growths. The Baron's lair is some sort of weird laboratory filled with human specimens, with needles in their eyes and ears stitched together.

For Lynch, this grotesquerie is linked with sexuality. In scenes of homoerotic vampirism, the Baron, drenched in some sort of aphrodisiacal soy sauce, hurls himself upon a male victim and pulls a plug out of his heart, which spurts blood around the room; floating upon suspensories, the Baron whirls madly around a kind of high-tech steam bath until his beloved nephew Feyd-Rautha emerges clad only in a codpiece, flexing his muscles and glistening with sweat. And the evil Guild Navigator, a huge shrimplike monster created by Carlo Rimbaldi, talks through a mouth that only a gynecologist could love.

These images are shocking, but their purport is clear -- by shocking us, Lynch uses the unbridled freedom inherent in the form (in an imaginary world, anything goes) to recast the potency of ancient myth. In "Dune's" best moments, Lynch creates an Artaudian theater of cruelty, in which images of disease and dark sexuality accumulate to create a metaphysical aura as spacious as the universe itself.

Lynch understands that the essence of science fiction lies in the creation of other worlds from scratch. The four planets of "Dune" are recreated with a stunning combination of awesome scope and meticulous detail, from the gilded, pillared majesty of the Atreides' empire (suggested to Lynch by a visit to Venice) to the Harkonnen's barren, colossal girders that seem to extend forever. The production design draws its power from its sheer scale, which demanded a huge budget. "Dino's crazy, but he's not crazy to spend that much money," Lynch says. " 'Dune' really did cost that much, even shooting in Mexico. It was necessary." But that budget created imperatives of its own. Despite everything that's brilliant about it, "Dune" is a tedious farrago of a movie, with characters and plot strands tossed together like pick-up sticks.

Meting out responsibility for the flaws in a movie can be as hard as ferreting out a syndicate capo; Lynch claims that the movie is his, that the big budget didn't affect his creative process. "For me the process is almost identical to my other movies," he says. Nevertheless, all that's wrong with "Dune" obeys the inner logic of moviemaking economics. With its swollen budget, a movie like "Dune" has to gross around $120 million just to break even (the rule of thumb is to multiply the production budget by three, to account for advertising and promotion, the cut of the theater owners and the like). It's a big gamble, so the producers and the studios do what they can to guarantee success.

In "Dune," these elements ambush Lynch at every pass. Because it is perceived that audiences will anticipate certain "blockbuster" features, the movie bulges with hundreds of extras whom Lynch choreographs clumsily (a great director, but a lousy traffic cop), and a big-name cast of supernumeraries in the tradition of "The Longest Day" (Linda Hunt, for example, growls two lines, then leaves the screen with a knife in her back). "Dune" centers on Paul Atreides, played by Kyle MacLachlan, whose blandness makes good economic sense, too (here's the kind of everyday handsomeness a teen-age audience can relate to). But this focus steals the show from the Harkonnens, who excite Lynch's Gothic imagination; when a director with a flair for the bizarre tackles a conventional hero, the result is as lively as steamed rice.

Most of all, "Dune" is undercut by its groveling fealty to the Frank Herbert novel on which it's based; there are simply too many characters and plot lines in the book for a movie of any reasonable length, but instead of paring the story, Lynch includes all in abbreviated, cartoon form. Again, it's plausible to pin the tail on the producers -- Herbert's novel has sold 15 million copies, providing the project with a built-in audience. But in catering to the expectations of this audience, Lynch has created a $40 million foofarow that freezes the rest of us out. It has its moments, but gee, not at these prices.

In "The Cotton Club," we see Coppola confronted by the same difficulties Lynch faced, and others besides -- but somehow transcending them. As chronicled by Michael Daly in New York magazine, the project was a maelstrom of conflict almost from the beginning, as money flowed and money fled and money was stitched back together.

As in "Dune," the budget became an obstacle in itself. "The budget is something like a mirage," Coppola says. "Just like the budget for a skyscraper or the MX missile program, the money tends to go to certain vested interests. The Teamsters hear this is a big-budget movie, so they want a full contract, whereas on a small movie they'll give you a break.

"Usually your first reaction when you hear the budget is, 'What? Where's it going?' And then you hear that there's one million for insurance, and eight or nine producers credited, each of whom gets at least $100,000, and it's just like a household budget -- you can't believe it's so high. So the squeeze is on, because so much money is being spent, but you don't see it."

And as in "Dune," the flaws stem from the nature of the movie industry. Before Coppola got involved, producer Robert Evans had signed up Richard Gere -- this bankable star allowed him to presell the project to European distributors, which in turn became the basis for studio backing. Gere wouldn't play a gangster -- he insisted on being good-guy Dixie Dwyer, a cornet player. But in the actual Cotton Club, all the entertainers were black. So with Gere excluded from the club -- and from racketeering -- Coppola and William Kennedy, his cowriter, had to jerry-build a superfluous story line just for Gere.

Worse, Gere is such a smug, uninvolving presence that he sucks the juice out of every scene he's in (Kennedy wrote in Vanity Fair of persistent attempts to "enhance" his star). But, unlike Lynch, Coppola makes a virtue out of necessity. He reduces Gere to a prop in a brilliant tour de force of camera style, particularly in his love scenes with Diane Lane. And Coppola and Kennedy poke fun at Gere with a subversive inside joke, in which a studio executive, viewing a screen test taken by Dwyer, opines, "He can't act."

With Hollywood's sequelmaniacal logic, the idea was to reunite the team that made "The Godfather" (Evans, Coppola and Mario Puzo, who gets a story credit) and remake it. Coppola, predictably, was bored by the spin Evans wanted the story to take (after all, he had made "The Godfather" twice already), and the lackadaisical quality of the gangster scenes reflects that. These competing strands and de rigueur blockbuster elements -- many of them set in concrete by the time Coppola and Kennedy came to the project (five weeks before shooting) -- suggested a story too large for a two-hour movie; like "Dune," it was impossible to manage in a conventional way.

But where Lynch caved in under the sheer weight of his story (this blockbuster proved to be a director-buster), Coppola succeeds by reinventing cinema. Where most movies are pulled together by their story, Coppola instead creates unity through a consistency of mood and theme and through the stylistic bravura of image and sound. The characters don't exist as people but as symbols, presented in the hieratic style of Oriental theater. "My interest is more like Kabuki," Coppola says, "in that each element plays that part of the piece that it can do best. The experience of seeing Kabuki is of being handed over from the actors to the scenery to the music as equal elements of the piece, rather than some of the elements being in the background."

One of the organizing themes of "Cotton Club" is the relationship between art and life; perhaps because it's grounded in an actual historical situation (drawing on a book by Jim Haskins of the same name), this ide'e fixe of Coppola's comes across more powerfully than it has in any of his movies since "The Conversation." In art lies escape, both for Hollywood-bound Dwyer and for the black performers; at a climactic moment, a tap-dancer flies gracefully across the stage to kick a gun from a gangster's hand. And "Cotton Club" concludes with a splashy production number that moves seamlessly from the stage of the club, dressed up as Grand Central Station, to Grand Central station itself, where the stars make their curtain calls as they board a train. Art triumphs over life; in a movie that uses art-film techniques to rise above the circumstances of big-budget moviemaking, that theme resonates. At $47 million, it's a bargain.