Peter O'Malley remembered the phone call with a mixture of bemusement and lingering disbelief. The Republican leader had phoned to put him on notice that he. Peter O'Malley, president of the Capitals hockey team, lawyer and behind-the-scenes political operative, would be the campaign issue next year in Prince George's County, and possibly even statewide.

"He felt it was appropriate to call me up, like two duelists prior to meeting in the field of battle, and give me the courtesy of telling me they were about to slay me in the street." O'Malley recalled.

"He was drawing analogies to the fastest gun in the West and John Wayne coming down the middle of the street at high noon and we were gonna shoot," O'Malley said. "He was telling me that he would not stand me with the sun in my eyes and have an ambush man behind me. . .

"He said, 'You've become the symbol of the Democrats, so we think the two-party system requires knocking you off and you're the quickest route back for the Republicans.'" O'Malley related.

At the age of 38. O'Malley is widely regarded as the most powerful political figure in the sprawling, diverse jurisdiction of 700,000 people. He is the architect of the county's Democratic Party organization -- called a machine by its critics --whose members occupy every important political office in the county.

He is the alter ego of Maryland Senate President Steny Hoyer, of District Heights, whom O'Malley hopes to help put in the governor's office in the 1978 elections.

He is one of the fathers of the Capital Centre, the arena Abe Pollin built on county parkland, which has brought professional basketball, hockey, the circus, the Beachboys and the Grand Ole Opry to a cornfield by the beltway. He is president of the Washington Capitals, the area's professional hockey team that plays at the arena.

O'Malley's law firm is itself one of the most expansive institutions in the county. its clientele includes major shopping centers like Iverson Mall, major developers like William Levitt, Jr., and until the recent departure of one of its partners, seekers of major zoning decisions throughout the county.

The many roles of Peter O'Malley sometimes overlap and when they do, it can generate intense controversy. Most recently, he sought unsuccessfully legislative approval of a $31 million convention center to be built with state, county and private funds near the Capital Centre. The developer, Levitt, is a client of O'Malley. The county's legislators, many of whom are political allies of O'Malley, were asked to help get the state money. The county government, run by Winfield M. Kelly Jr., a leader of O'Malley's Democratic Party, was asked to help subsidize it.

The legislature defeated the O'Malley proposal, raising questions about his ability to apply clout outside the county and further complicating Hoyer's campaign for governor.

The controversy that surrounded the convention center proposal also brought O'Malley into the limelight: something he had hoped to avoid.

By most people's standards, O'Malley is at the top of the heap. He has money power and success. At the same time, however, he appears terribly insecure about his image, almost desperate in wanting the approval of the people he calls "opinion makers."

He deeply resents being called a boss. "I think any successful endeavor requires somebody to provide the initiative and do the ministerial chores," he says of his role. He deeply resents suggestions that be is in politics for personal gain. "It replaced competitive athletics," he says. And what is a political "machine" to some critics, is simply an efficient, democratic melding of various feuding factions in order to get things done better. "What was attempted here was to come up with a climate where people could perform," he says.

Two years ago, O'Malley obtained appointment as a regent of the University of Maryland to establish credibility and respect with area opinion makers. He wanted to be taken seriously, he said.

In Prince George's County, beyond the power center of the nation's capital, O'Malley is taken seriously. On his own turf, he is a sight to behold.

He is obviously at home as he enters the Capital Centre. People reach out to shake his hand. At the final home game of the Canadian-dominated Capitals of which he is president, it is O'Malley who introduces a popular French-Canadian singer to lead the crowd in both national anthems.

On another night at a Clinton junior high school, there is O'Malley again at a benefit for a boy's club basketball coach whose daughter has been ill. The children seek his autograph along with those of the hockey players he has encouraged to appear.

It is. O'Malley told the crowd as he handed the coach a check. Frank Stoppa's night. But it is, in a way, Peter O'Malley's night too.

He praised the "tremendous display of neighborhood participation and community togetherness -- that's what it's all about." There were applause and tears. It was all there, all the old virtues that are important to O'Malley: family, neighborhood, athletic competition and a courageous fight against the odds.

O'Malley could identify with Stoppa's struggle. He too, was an undergo, an Italian-Irish kid from a working-class family in central Massachusetts a first generation American success story, a tough competitor against the odds of life.

"He's not just out to play the game," said Russell Shipley, his former law partner. "He's out to win. . . Pete is competitive tothe point where if you wanted to make this ashtray a home of contention, he would fight you to the death."

O'Malley said he has a motto about it: "Men don't lose. They quit," he said. "People will say O'Malley never quit."

At his own initiative, O'Malley supplied a reporter with a list of 30 persons he might interview about him. Some had been adversaries, he said, but all had one thing in common: "All are achievers."

Yet, despite his own achievements, O'Malley remains restless and dissatisfied. He hungers for new challenges and is ambivalent about his combined career of politics and business.

Politics -- once an asset to him professionally -- has increasingly become a millstone around his neck. Critics insist on calling him a political boss and in the post-Watergate era, it hurts.

It hurt, for example, when he tried earlier this year to promote the convention center-hotel complex to be built near the Capital Centre by William Levitt Jr. his cleint. The project required state-backed bonds, but O'Malley's blending of business and politics did not play well in Annapolis, where he and Prince George's County were flatly rebuffed.

It hurt also when his law partner of many years, Russell Shipley, turned off in part by O'Malley's political bent, decided to leave their partnership this year, taking with him a slew of clients and two other lawyers.

It hurts him personally, he says, when his motives are automatically suspect as self-serving when they aren't.

Sometimes they are self-serving, and O'Malley will be the first to tell you when for he is a firm believer in the tenet that you can do well while doing good.

"Profit makes the world go round," he says without apologies. "It's the underpinning of everything."

What's good for free enterprise, in his view, can be good for Prince George's County. To prove his point, ne noted that three of the major projects with which he's been associated --at Rosecroft Raceway and the Capital Centre -- brought the county 4,000 jobs and $10 million to $12 million in new taxes.

"I have no sense of apology or defensiveness about my political or business activities over the years," he said. "I'm proud to be a participant."

O'Malley has jealously guarded his privacy. He was just a lawyer or businessman, he used to say.Now, belatedly he acknowledges that his many roles make him an appropriate figure for public scrutiny.

"I think my problem has been," he said, "that I was too slow to realize that the credit or the blame was going to come anyway, and therefore, you might as well be a little more visible."

O'Malley had an unpretentious beginning in the other Clinton in Massachusetts, the one President Carter visited, where, O'Malley recalls, politics was "a term of honor." His parents still live there. his father is still a postal worker, his mother still checks and bags groceries at the local supermarket.

O'Malley graduated from Mount St. Mary's a small Catholic collge in Emmitsburg, Md., the first in his family to earn a college degree. He worked on the school paper with Frank di Filippo, later the press secretary to Gov. Marvin Mandel: was involved in student government but not its head participated in track and held a succession of part-time jobs, from sweeping the school gym to selling apples by the roadside in the Catoctin Mountains.

Direct from "the Mount" in 1961, O'Malley held jobs as a Capital policeman and elevator operator under the patronage of a Massachusetts congressman, and attended Georgetown law school at night. O'Malley and his young family lived then in a two-bedroom apartment in Glassmaron, right across the District line in Prince Georges.

"Those were thin days," recalls in Vincent J. Femia, a law school friend who is now a Prince Georges' judge. "We all played cards in one or the other's apartment. The kids slept while we played hearts. Nobody could afford a damn babysitter."

In his few spare moments, O'Malley would spend time with other ambitious young Hill employees plotting their future. "Peter never run for office," explains Spencer Oliver, a member of the group who later became a national president of the Young Democrats and remains close to both O'Malley and Hoyer, "because he was the one who most wanted to make money."

In the years since, O'Malley has made lots of money, but he retains what his friend, Del Gerard P. Devlin D-Bowiel calls "successful working man's tastes. He wears what look like Robert Hall suits. He has never taken on the trappings of wealth. He very assiduously maintains friends from the old days. . ."

O'Malley lives in Clinton, Md., with his wife, who was his high school sweetheart, and their five children in a tract home whose major distinguishing feature is a paved basketball court in the backyard.

There's a condominium in Ocean City for summer weekends. There's a family station wagon and O'Malley's single status symbol, a green Jaguar. "He tried out a red one but didn't like it -- too flashy! The O'Malleys live comfortably but not lavishly.

O'Malley's law office in a large white-columned building in Largo rented from Levitt mirrors to a degree his interests and self-image.

There are the inevitable framed documents admitting him to practice before various courts. There are numerous political biographies on his bookshelves, including "Boss" an iconoclastic portrait of the late Chicago Mayor Richard Daley. And there is a framed cartoon tracing his rise from Capitol Hill cop/elevator operator to the present. It carries the legend. "From Capitol Hill to Capital Centre."

Philosophically, Peter O'Malley is an old-fashioned, middle-American conservative, but he is an essentially nonideological politician admittedly focused "more on form than substance." His Democratic registration is simply part of his birthright, like being born Republican in Kansas.

His economic philosophy, however, came with age, experience, and a couple of years ago, his discovery of author Ayn Rand. He even has a way of sounding like John Galt, the hero of Rand's "Atlas Shrugged" who leads a band of capitalist achievers in strike against the creed of unearned rewards and unrewarded duties."

Tomorrow: The Peter O'Malley show.