Montgomery County Police Sgt. Douglas L. McFee thought he was going to a bank robbery when he was called to the Citizens Bank of Maryland in the Blair Plaza Shopping Center in Silver Spring early on the evening of Feb. 9, 1977.

But when McFee got there, he found that a man carrying two rifles was holding bank employes and customers as hostages in the rear of the bank. the ranking officer on the scene decided that McFee, who had attended a three-day seminar on the technique of hostage negotiation, would be the one to try to make contact with the gunman, now wildly firing around the bank.

"I thought to myself," recalled McFee, "Well, here's a chance to try out what I learned in the seminar."

Six and a half hours later, McFee's first-time try at hostage negotiating, plus the work of seven SWAT team members at the scene, had resulted in the release of all hostages and the capture of the gunman, Stephen Wyatt Gregory, 27, with no one injured.

McFee and the seven-member SWAT team are among 12 police, fire and rescue squad personnel who were honored for heroic acts with Meritorious Service Awards at a luncheon last week.

The county government and the Montgomery County Chamber of Commerce sponsored the fourth annual Awards Program for Montgomery County Police Officers and Firefighters.

The sponsors cited the SWAT team members for honorable mention and awarded, for the first time, the Gold Medal to McFee for his part in that February evening's tense confrontation.

McFee first contacted gunman Gregory from the command center set up in a People's Drug Store near the bank. Using the pharmacist's telephone, McFee called the bank and Gregory answered the phone. McFee identified himself, but the hostage taker hung up. McFee called four times before Gregory decided to stay on the line.

"I asked him what he wanted, how we could help him and keep the hostages safe," said McFee, who has a cool but gentle, even-toned Jack Webb voice. "he volunteered some information - he was unhappy with the amnesty program (for Vietnam War veterans), he had had a fight with his girlfriend."

Bits and pieces of Stephen Gregory's life were put together as Gregory shared them with McFee and as information from friends and relatives came in to the drugstore command post. Gregory talked more freely with McFee. An hour and a half later, the first hostage was freed in exchange for a hullhorn.

"I felt really happy," remembered McFee. "Oh, you did that good, Steve,' I said to Gregory. 'How about another?'"

Two hours later, another hostage was freed for submarine sandwiches. Later, another was exchanged for a six-pack of beer.

"We had one bank employe secreted under a cage and we were afraid rifle shots ricocheting around the bank walls might hit him," she McFee. "So I told Gregory about the employe he didn't realize was there: "Steve, there's something you don't know, but I want you to listen carefully . . .'"

Gregory called out to the hiding employe who emerged crying and shaken. "Then Gregory released him," recalled McFee. "Gregory seemed really happy that I was being honest."

McFee built a rapport with Gregory with guidance of Buck Fry, the FBI agent who had taught McFee in the seminar on hostage negotiation and who was called to the scene for his expert help, and the aid of a psychiatrist. "I began to kind of get a gut feeling that the hostages would get out," said McFee.

He was more convinced after his first face-to-face confrontation. Gregory, at one point, threatened to pull the trigger of his gun held to a hostage's ear unless McFee came into the bank - unarmed.

"That was hairy," the police sergeant recalled. "But I went to the bank and walked in. He fired a couple of shots over my head to impress with his power over the situation. I was impressed."

The conversation in the bank, according to McFee, was tense.

"'Okay, I'm here,' I said. 'What do you want with me?'

"Gregory replied, 'I can kill anyone I want.'

"'That wounldn't prove anything," i said. 'Now why would you want to do that?'"

After checking the back of the bank to prove to Gregory that no police officers had infiltrated the building, McFee was allowed to back out of the bank. 'The fact that he didn't kill me gave me the confidence that he wouldn't shoot the hostages," said McFee.

As the evening became night, McFee logged in each of the 30 or 40 phone conversations he had with Gregory - none more than 10 minutes - from the People's Drug Store, acutely aware of the time, but not of its passing. "It seemed like it went by very quickly."

Their ramport grew, and McFee felt protective toward Gregory. "I knew if we could get the hostages out, we wouldn't have to shoot him. But several times he would fire wildly; he would just go off the deep end. We just didn't know what he would do."

When the last hostage was out, McFee said, "We felt it was our ballgame. We would wait, we gold Gregory. We wouldn't hurt him." At least McFee made arrangements to walk to the door of the bank with Gregory's mother. Gregory, after putting down his guns, would walk out with McFee. But after the rifles were laid down, SWAT rushed in and grabbed Gregory.

"He kind of felt I betrayed him," said McFee. "I was just happy no one got hurt."

At 1 a.m., the ordeal over, McFee went back to his office to finish paperwork. He returned home at 5:30 that morning where his 20-year-old son had waited up. "He has wanted to be a policeman and is now applying for next June's class," said McFee.

Since that February night at the bank, more than a year ago, McFee only has been involved in one more brief and less critical hostage situation. McFee is back in uniform now as a shift-supervisor at the Wheaton Glenmont station. "I'm very honored to receive this award," he said. "I'm very proud. I hope in some way it helps my son."

He added, "I don't think there's a man who wouldn't have done what I did."