Former Portsmouth mayor Richard J. (Dick) Davis was expounding his conservative economic beliefs in a Leesburg restaurant recently when he paused in mid-sentence. Would the waiter please blow out the candle on his table?

"What's the matter?" the waiter asked. "Don't you like candles?"

"I like them," Davis replied. "I just don't think you should waste your money."

Virginians might expect such a comment from a disciple of Republican Gov. John N. Dalton or the GOP candidate for governor, J. Marshall Coleman. That it came from the ruddy, white-haired Davis -- until recently the head of the state's Democratic Party -- is a measure of how the party has changed to match his own conservative, business-oriented image.

This weekend, Davis' efforts as party chairman are expected to lead to his nomination for lieutenant governor and running mate for another conservative Democrat, Lt. Gov. Charles S. Robb. Selection of that ticket, many in the party say, could be the Virginia Democrats' last foreseeable chance to rid themselves of a liberal image they picked up from presidential candidate George McGovern in 1972 and haven't been able to shake since.

"The party has clearly realized that you can't nominate a liberal and win," says Larry Sabato, a University of Virginia political scientist. "The state is too politically and socially conservative for that. They realized that they would have to moderate their image."

Coleman, meanwhile, is already marking out a plan to discredit his likely opponents with tales of previous links between Davis and Robb and the Carter administration.

"Imitation is the sincerest form of flattery," says Neil Cotiaux, spokesman for the state Republican Party. "But Chuck Robb and Dick Davis are trying to be carbon copies of Virginia Republicans, and we want to make sure it isn't going to wash."

Davis also has drawn fire from Northern Virginia labor lawyer Ira M. Lechner, his liberal foe for the Democratic Party's nomination for lieutenant governor. Lechner complains that Davis is trying to edge liberals out of the party and charges that the Davis campaign engaged in Watergate-style dirty tricks to win its convention delegates.

But most party regulars expect Lechner's challenges to die in credentials and rules squabbles early in the Virginia Beach convention. That would leave to Davis the task that many say he performed so well during his two-year tenure as state party chairman: cajoling the party's warring factions into unifying at the polls.

"He's got conservative credentials as well as liberal credentials," says state Del. Alan A. Diamonstein, who claims partial credit for launching the mortgage banker's career in state party politics two years ago. "He can go to either side. He can get the respect of anybody he talks to."

A self-made millionaire who grew up in poverty, the 59-year-old Davis' background sounds a great deal like the Horatio Alger-style success story he is describing for Virginia's economy.

Born in Portsmouth of Irish Catholic parents, Davis says he still remembers the anger he felt at age 7 when the Ku Klux Klan burned a cross on the family's front porch in an apparent protest against Catholic presidential candidate Alfred E. Smith.

When his father died of cancer a short time later, young Davis helped his mother augment a slim income by selling peanuts and popcorn at baseball games, delivering newspapers and working in a movie theater.

Today, Davis has moved up from the bleachers to be president of the group that owns the franchise of the Norfolk area's Carolina League baseball team, the Tidewater Tides. He is also one of the wealthiest men in Portsmouth, with a net worth estimated at close to $6 million. He controls a mortgage investment company, owns two Tidewater radio stations and serves on the boards of directors of several banks and businesses.

In campaign appearances, Davis exudes an aura of corporate responsibility and caution. His manner routinely is soft-spoken and deliberate, as if he were holding forth in a board room.

"He appeals to moderates and conservatives because he's a banker, because he comes from the right background and he's rich. He's all the things they admire and love," says Sabato. "Liberals like him because he's a real party man. He went out in 1980 at great personal risk and stumped for Jimmy Carter."

Traveling across the state to woo uncommitted convention delegates last week, Davis has repeatedly stressed his experience as Portsmouth's mayor from 1974 to 1980 when he worked to create a favorable business climate and encourage firms to relocate or expand in the city -- a strategy he would now like to employ statewide.

As mayor, Davis won the support of blacks and labor by pushing hard to redevelop his then-floundering port city. He also drew heavy fire from environmentalists for his support of a proposed oil refinery in Portsmouth, which he defended as a financially and environmentally sound method of boosting the city's tax base.

Davis shares his view of state economics with Robb, as he does almost all his positions on current political issues. Both men favor continuation of the state's right-to-work law, oppose collective bargaining, favor ratification of the ERA, and favor limited federal funding of abortions and repeal of the state's 4 percent sales tax on food.

"I do not mislead you or myself by suggesting that the lieutenant governor in the state of Virginia has the potential to influence a great deal of your life," Davis told a group of Rotarians in Winchester. "But there's more to it than presiding over the [state] Senate."

Part of the appeal of the No. 2 position could well lie in the well-traveled path from the lieutenant governor's office in the Bell Tower in Richmond to the governor's mansion a few hundred yards away. Two of the state's last three governors were able to use the office as a springboard to the state's highest executive position.

Still, Davis doesn't encourage speculation about why a man of his wealth would seek a job that pays only $15,000 a year and carries almost no responsibilities. "I'll give you an honest answer which I know won't be believed," he says. "I'm not now running for governor."