"I was petrified when KB Theaters told me I would be the manager of the Takoma," said Larry Levine. "The location, reputation . . . I thought of getting robbed."

He laughs at that now as he butters popcorn and hands out orange drinks to the children smiling as they bound up to the counter. "How different this place is from its reputation."

The Takoma, one of those solid brick buildings of days-gone-by, sits at the corner of Fourth and Butternut streets NW. It used to be a lot of things to a lot of people. A place years ago where you could watch a newsreel, cartoons and two movies for a quarter. A place where yo-yo contests were held on Saturday afternoons. A place where neighbors greeted neighbors on family night-out.

It also used to be a place where X-rated firms were shown, and most recently, where the KB Theaters chain featured Spanish-language films on weekends.

But during the last two months a group called the Neighborhood Films Association (NFA) has been showing family-oriented movies in an effort to bring the theater back to life.

The group started with a variety of motives, but all were united in their desire to revitalize their neighborhood in some way. With contributions ranging from $5 to $500, from individuals, business and other community groups, they came up with $1,600 in "seed money" to begin their venture.

KB's lease on the building, which is privately owned, was too much for the group to handle financially, so an agreement was drawn up to sublet to the NFA on Thursday and Friday nights. The KB management employs the projectionist and theater manager, but the NFA group itself is responsible for choosing and obtaining the films.

Some members, like Sandy Haley, have a deep emotional link to the theater. "I'd like to see this become the same kind of theater I knew as a kid. I even won a bicycle on this very stage many years ago," he smiled. "It used to be the gathering place, the hub of this community."

Sara Green has other rasons. "We're not spending all this time just to see a few films," she said. "We want to do something in this community that's going to make an impact. The Takoma Theater could be our starting point, our anchor."

With the opening of the Takoma Metro station within walking distance of the theater, the group is hopeful that new development and revitalization of their area will follow. But they are firm on what kind of development they want.

"We feel threatened by what I call the "tear down" philosophy," Green explained. "We are not afraid of development; in fact we welcome it. It's the kind of development we fear. We don't want any 10-story office buildings here."

Some of the members, like Gillian Butchman, feel that the theater could be used in conjunction with the school system. School groups have already been coming to the theater to see films such as "Camelot," and she said she hopes to work with more schools this summer and into the fall on coordinating films with their curricula. She said that she feels films can be useful learning tools for children.

The films the group has obtained so far range from classics like "Robin Hood" to more recent ones such as "The Spy Who Loved Me."

When asked why they don't try to show first-run films, Butchman replied, "To the children (and some of the adults), a film like "Singing in the Rain" is a first-run.

"There's also a real difference between watching a movie on TV where it's chopped up by theater. Besides, seeing an old movie in an old theater is also a treat."

Indeed, when Donald O'Connor finished his famous dance number, "Make 'Em Laugh" from "Singing in the Rain," the audience, made up mostly of school-age children, clapped wildly, as if he were there on stage.

Green and others have been handing out flyers at the Metro station announcing that the theater is once again open for business. Families are coming to the theater on Friday nights. Neighbors are greeting neighbors and asking about the turnout the night before. There is a feeling of common purpose in the crowd.

KB's lease on the theater runs out next year and plans are uncertain for the future. But the NFA has high hopes and the support of the community as a whole.

"This theater is symbolic," said Green. "A symbol of our ability to adapt - to Metro, to development . . . It solidifies us as a community."

This week the group will take over the theater on Friday and Saturday nights, with two children's matinees on Saturday. Also this week the NFA will begin selling bargain ticket cards, making it possible to see 10 movies for $10.

Perhaps there will never be another yo-yo contest at the Takoma Theater like there used to be, and we'll never be able to see a movie for a quarter, but for right now the Takoma is lit up again, even if it's only two days a week.

The Takoma Theater, Fourth and Butternut streets NW. 829-0001 or Neighborhood Films Association, 722-1894 or 291-2784. This week: (June 2 and 3) "The Miracle Worker," Friday, 7 and 9 p.m.; Saturday, 6, 8 and 10 p.m. and Saturday children's matinee, 2 and 4 p.m., "Ring of Bright Water." Admission $1.50 for adults, $1 for older adults and students under 17 (includes both films); $1 for all tickets at Saturday matinee.