He watched his best friend die at his side during the Vietnam War. And after witnessing Iranian publicly poking the bags containing dead Americans on television after the failed hostage rescue attempt last spring, Francis Holford apparently had had enough.

According to Prince George's County prosecutors, the sandy-haired Holford, 25, armed with a rifle, broke into the College Park apartment of what he thought were several Iranians, intending to hold them hostage. Finding it empty, he fired a shot through the window, wounding a paperboy. When police arrived, they found Holford sitting in the corner, shouting out his name and former Marine Corps rank and serial numbers.

Holford faced charges at an insanity hearing yesterday. He was found innocent by reason of insanity on four counts -- assault with intent to kill, breaking and entering, simple assault, and malicious destruction -- and was ordered to Clifton T. Perkins State Hospital in Jessup, Md., for treatment.

According to testimony before County Circuit Court Judge Howard Chasanow, Holford had personality and drinking problems since 1973, when his best friend was struck by an incendiary flare in Thailand. Holford was at his friends side but was unable to put out the fire before his friend burned to death.

The sniper attack last May 24 occurred after Holford watched televised pictures of the bodies of American rescuers being abused in Iran, went drinking at several bars, then broke into the apartment on the University of Maryland campus, prosecutors said. The shooting victim was 16-year-old Washington Post newspaper carrier, Edgar L. Penzo of Hyattsville, whose wound was not serious.