Michael Parker says he wakes up every morning wondering why he's still in the business.

"It's not very exciting. I don't make a lot of money and it's illegal."

Parker, also known as Brian P. Anderson, is a tall, 28-year-old model and entrepreneur who operates a male "escort service" and nude photography salon in the heart of historic Old Town Alexandria.

Behind the wooden shutters of the $100,000 rented town house at 807 Duke St. are three bedrooms, a bank of telephones and a "dungeon" outfitted with sado-masochistic equipment for the homosexual clientele, Parker said.

"It's mostly leather equipment," he said. "A few 2 by 4s, I would't call it a rack, it's more like a play pen."

Parker's business, which he said is to "fulfil fantasies," is described by law enforcement sources as male prostitution.

But because the prostitution laws apply almost exclusively to women, federal and local law enforcement authorities said last week that homosexual operations like Parker's are virtually immune from prosecution.

"It's been a problem all along," said one official.

The Duke Street house also illustrate the frustrations of a city trying to crack down on its once flourishing sex trade.

Last summer, the FBI raided Alexandria massage parlors owned by Louis Michael Parrish, described as the "kingpin" of the largest call-girl ring in the Washington area. Two months ago, Parrish and two key associates were convicted of a total of 15 felony counts in federal court in Alexandria.Parish has appealed his conviction.

A federal grand jury is investigating possible corruption in the city - trying to determine how Parish was able to flourish in Alexandria after being successfully shut down in neighboring jurisdictions.

The City Council, learning that Parrish's operations had reopened under new management months after the raid, later enacted a strict ordinance designed to shut the parlos down. The owners retaliated by calling their businesses "health clubs."

Parker began operating out of waterfront high rise, The Alexandria House, several months ago under the names Fantasies Unlimited, Secret Services, Creative Exposures and Brian's Boys Model & Escorts, according to law enforcement sources. He and a partner, J. C. Reynolds III, moved the business to Duke Strett in March.

Parker, who wears a diamond ring, began operating out of a waterfront high rise, The Alexandria House, several months ago under the names Fantasies Unlimted, Secret Services, Creative Exposures and Brian's Boys Models I Escorts, according to law enforcement sources. He and a partner, J. C. Reynolds III, moved the business to Duke Street in March.

Parker said his models and escorts, ranging in age from 18 to 30, are dispatched to Virginia, the District of Columbia and Maryland.

If parker employed women, according to federal authorities, they would have no problem in making arrests. But the Mann Act, the federal interstate prostitution law, clearly states that the violation is in transporting women across state lines for the purposes of prostitution.

"The Mann Act doesn't cover men," said one FBI agent.

One Alexandria police investigator said last week that the city's vice squad is undermanned and unable to conduct a thorough investigation to obtain enough evidence to support a search warrant.

"We really don't have any law that covers men," said the police investigator. "The law covers soliciting, but we would have to prove sodomy. To do that, we'd need to send someone in undercover, which was already out of court during the massage parlor investigation."

Parker was convicted of operating a house of prostitution in Silver Spring three years ago after his massage parlor was raided by Montgomery County police in May 1976.

Parker also said he is aware that local authorities are investigating his Duke Street operation.

The gray brick townhouse-two blocks from the U.S. Attorney's officer-is listed in a guidebook to historic homes in Alexandria. The two-story structure dates to the mid-19th century and is marked by an oval plaque issued by the city's Historic Foundation.

Other houses on the historically preserved, three-lined street sell for $100,000 to $200,000, according to the rental agent, who was "shocked" last week to discover what went on inside number 807.

"He said he was a photographer," the rental agent, who asked to remain unidentified, said "I notice three phones in the basement. He told me one was personal, one was for business and one was for his escort service."

Parker, according to the rental agent, said the service was "a legitimate one."

"But I've noticed," the rental agent said, "that the shades are always drawn."

Charles R. Hooff III, whose real estate firm leases the property for the out-of-town owners, said last week, "I just can't fathom it. Either law enforcement is lax or our laws are lax. But there's nothing we can do about it. They have a valid lease."

Parker, defending his line of work, said, "I'm not hurting anyone. Why don't the police go after robbers and violent criminals? There are a lot of lonely people out there. I'm offering them a service. All they want is companionship."

Parker's clientele, he said, includes professional men, married and single, from the Washington area. "There are a lot of gays in Alexandria," he said.

Parker said his small business attracts only six or seven clients a day who pay with cash, check or credit card. He employs an accountant, a lawyer, a telephone answerer and about a dozen male models.

Parker said he hoped to sell the business soon to start a gay-oriented magazine similar to the ones his advertisements can be found in.

"I know I'll probably be busted," he said last week. "I called my lawyer last night. He was worried. I told him to let me handle it."

Parker, an articulate, well-groomed graduate of the now-defunct Lacaze-Gardner business school in the District, said he would be willing to stand up in court and "tell the jude before he sentenced me all about this kind of business and why I'm not hurting anyone and how it should be legalized. I think a lot of people agree with me." CAPTION: Picture, Several homosexual businesses are operated out of this historic town in Old Town Alexandria. By Douglas Chevalier - The Washington Post