A 29-year-old Falls Church gravedigger charged with murder in the decapitation of his roommate was ordered held yesterday for grand jury action.

The defendant, William S. Bly, is jailed without bond. Fairfax County General District Court Judge Robert M. Hurst ordered the case heard by the county grand jury on Monday.

Police testified during yesterday's preliminary hearing that when they arrived at 619 Laura Dr., Falls Church, on March 2 to investigate a report of a domestic disturbance they found Bly "covered with blood from head to toe," sitting on the front porch.

Falls Church police officer Kevin McCormick testified that when he questioned Bly, the gravedigger replied, "I just killed a man in there."

Inside police found the body of Daniel J. McAllister, 36, lying inside a bedroom doorway. Police photographs showed McAllister's head lying on a towel spread on the floor several feet away.

Bly was not required to enter a plea to the murder charge yesterday. His attorney, Gerard F. Treanor Jr., said he is considering an insanity defense. State psychiatric examiners have found Bly competent to stand trial, but said he suffered from some psychiatric problems, county prosecutor Robert F. Horan Jr. said.

McCormick said Bly appeared "very calm and passive" at the scene of the slaying and told police he had used a knife to stab McAllister and a broken glass ash tray to sever his head.

At the time of the incident, police said the two roommates apparently had been arguing.

Bly sat through yesterday's proceedings quietly.

Bly and McAllister had both worked as gravediggers at nearby National Memorial Park, police said. They lived in the one-story rambler house on Laura Drive with a third roommate, who reported the disturbance to police.