A 26-year-old Washington man, accused of inserting a sewing needle into a stick of butter at a Capitol Hill Safeway store Sunday, was ordered held on a $2,500 bond by a U.S. magistrate yesterday, pending a report from the man's psychiatrist.

The suspect, Grant Day, a resident of a halfway house run by the D.C. Department of Corrections, was arrested by Washington police, one day after officials from Safeway and Giant food stores disclosed in a press conference that needles and other items had been found implanted in food on 23 other occasions.

U.S. Magistrate Jean F. Dwyer ordered the report from a psychiatrist who has been treating Day on an out-patient basis while he has been a resident of the halfway house, located at 1010 North Capitol St.

Day was committed for six to 18 months on a work release program to the halfway house by a D.C. Superior Court judge after Day was found guilty of petit larceny charges, according to his court-appointed lawyer, Alan Bayles. Day was scheduled to be paroled from the house in April, Bayles said.

Day had been charged under the federal Food, Drug and Cosmetic Act with one count of alteration of an item shipped in interstate commerce for sale, according to the U.S. Attorney's office. The charge is a misdemeanor, punishable by one year in prison, a $1,000 fine or both, the U.S. Attorney's office said.

At a brief hearing yesterday, Day, who wore a long, brown tweed overcoat and held a black knit cap in his hand, told Dwyer that he had been out of work for about two months. A report by the D.C. Bail Agency said Day had worked as a janitor at the Municipal Center - which is police headquarters. When asked by Dwyer if he had the money to pay an attorney, Day said he had "just about $10."

According to court records, Day was arrested after a female customer at the Safeway located at 228 7th St. SE observed a man insert an object into a 4-ounce stick of butter. The woman alerted a store officials, who discovered a silver-colored, 2-inch-long sewing needle in the butter, the records said. Police later located Day at a bus stop near the store and returned him to the Safeway where he was identified by the woman.

Deputy Chief William R. Dixon said the investigation into the food tampering incidents is continuing. Dixon, commander of the seventh police district, is coordinating a city-wide investigation into the incidents.

"It is a distinct possibility," Dixon said, that persons other than the arrested suspect, may have been involved.

Police investigators met with several security officials from Giant yesterday to compare information, Dixon said, but he termed the results of the two-hour meeting "inconclusive."

According to police, five of the 23 incidents before Sunday occurred at a Giant store in Washington. The remaining incidents occurred at Safeway stores in the District of Columbia and at one store in Arlington, police said. The addresses of the stores involved were not disclosed by police of by Giant or Safeway officials. The first incident occurred Feb. 17 at a Safeway store.

Following Day's arrest Sunday, a customer who purchased a bag of rolls at the 7th Street Safeway that afternoon reported to police that he found needles in the rolls when he opened the package. In the earlier incidents, objects - mostly sewing needles 1 1/2 to 2 inches long - had been found in a variety of dairy and baked goods. In one incident a package of frankfurters was involved, and, in another, a piece of wire and some glass was found in a container of margarine.

It was reported that metal objects were found in a package of shrimp purchased at a small private food store but the objects turned out to be staples that apparently got into the food due to faulty packaging, police said.

Police advised shoppers yesterday to continue to examine food packages carefully and to report any irregularities to store officials.

Following the hearing in U.S. District Court yesterday, magistrate Dwyer scheduled a preliminary hearing for Day on March 21.