Latteta Brown sat with her legs crossed on the sidewalk next to her homemade necklaces and earrings, surveying the surging crowd around her and smelling the corn tortillas, American hot dogs and Western African stew cooking in booths nearby.

"The vibes are very nice," Brown said, as a crowd moved closer to hear a soul group sing the disco song "Ring My Bell."

"Everyone seems to be open and warm and that's good for a change," she said.

It was the second annual Adams-Morgan Day festival celebrating the cultural and ethnic diversity of a community where artists, young professionals new to the area, Latinos and American blacks live side by side.

From noon until 10 p.m., hundreds of people, mostly young adults from surrounding communities, drifted through the two-block festival area on Columbia Road NW between 18th Street and Mintwood Place NW.

Some carried children on their backs in slings, others came on bicycles wearing tennis shorts and expensive athletic running shoes. They mixed with Hispanics in colorful shirts and blouses who stood in front of apartment buildings or in clusters.

They sampled Senegalese stew of chicken and brown rice served on paper plates by a woman dressed in a colorful African costume. Hispanic women, wearing contemporary clothing, flipped thick tortillas on a portable grill while men in the booth next to them served cool lemonade.

"What are you eating?" one curious man asked his friend, Gary Jones of Hillcrest Heights, who had just taken a bite from an orange-colored sausage. Jones answered, "I don't know, but it sure tastes good."

A young man with close-cropped hair and wearing shorts and T-shirt whizzed past on roller skates. Down the block, children stood in awe as several men attempted to raise a hot-air balloon, a kaleidoscope of blues, oranges, yellows and reds.

Of the 50 booths at the festival, a majority sold food. The aromas drifted through the air and mixed with the blaring sounds of salsa, soul rock and country and western music.

But there were many booths with signs and posters advocating causes, from donations sought for an arts scholarship fund, aid for residents of Santo Domingo devastated by Hurricane David, to Communists handing out leaflets and literature.

A group of Covington Apartment tenants staged a white elephant sale in front of their building at 1848 Columbia Rd. NW. They hoped to raise money to buy their building so that some tenants, who could not afford to buy a condominium could stay in the community.

For years, Adams-Morgan, bounded by 16th Street, Florida Avenue, Connecticut Avenue and Rock Creek Park, has been the refuge of artists, writers and the eclectic who found solace in a community rich with Hispanic and black culture. As the flower children of the early Sixties began leaving areas such as Dupont Circle, many of them moved to Adams-Morgan.

Like Dupont Circle, once the center of Washington's activist community, Adams-Morgan has begun to feel the influx of more affluent young professionals who are drawn by the cultural flavor the area offers. They move into costly renovated townhouses, condominiums and apartment buildings, ironically replacing those same lower-income residents who created the diverse atmosphere.

City Council members Hilda Mason (Statehood-At-Large), Betty Ann Kane (D-At Large) and David Clarke (D-1st), joined the festival participants for varying periods of time and said they were concerned about displacement. D.C. Mayor Marion Barry, milling through the crowd and signing autographs, also talked, in general terms, of seeking ways to keep the neighborhood's character.