A 10-year-old boy tiptoed into the shoe shop and gingerly placed a pair of ladies' shoes on the counter. From the other side of the counter, John (Peter Bug) Matthews picked them up, inspected the soles, then shot the question: "Why didn't you go to school?

"I'm going now, man," the boy answered with mock indignation.

"You better," Matthews said.

No youth in the Southeast neighborhood around the Peter Bug Shoe Academy escapes the watchful eyes of John Matthews. And while they sometimes protest his advice, the youngsters respect him because he has created a place where they can earn money, learn a trade and get some fatherly advice.

Today, the 5-year-old academy, housed in a small brick building at 1320 E St. SE, is holding an open house, the first of several activities sponsored by community supporters leading up to Saturday's fifth annual "Peter Bug Festival," featuring games, pony rides and bands.

There will be a talent show presented by a group of senior citizens tomorrow and a reunion for academy graduates Friday.

"This is usually a one-day affair, but we had to extend it to have all the things Peter Bug wanted," said Curtis Massey, festival chairman. "Tradition is important to him, so he wanted to have something for the senior citizens, something for those who have been through the program and something for the children."

At the academy, which is Matthews' brainchild, youths from 14 to 21 learn to repair shoes and run a shop while earning from $3.35 to $4.14 an hour. It is funded by the Capitol Hill Neighborhood Planning Council with a $12,000 annual grant from the D.C. Recreation Department. The department also renovated the building, once an annex to Buchanan Elementary School.

Customers pay only the cost of the materials, and senior citizens have their shoes picked up, repaired and delivered free.

"The academy is a neighborhood institution," Massey said. "From our perspective, there are too few programs offering alternative education to kids.

Matthews said his primary goal is to work with underprivileged people.

"I tell the kids everybody can't play basketball or be a Diana Ross," said Matthews, who still lives where he was raised, just a few blocks from the academy.

"Peter Bug is like your supervisor and your father, too," said Pamela Douglas, 18, an Eastern High School senior who has been at the academy for a year. "He's always there when you need him."

With Matthews' help, Douglas said, she has became more confident and participated in more school activities. Her yearbook names her "most talented," "most versatile" and "most popular." When she ran for and won the vice presidency of her class, Douglas said, "Peter Bug helped me with my campaign material and speeches.

"He teaches us pride in ourselves and our community," she added.

Matthews returned to his community after attending a technical school in Oklahoma and graduating from Federal City College, where he majored in sociology and anthropology.

"He could always relate to parents and children," said Alphonso Williams, a counselor at the University of the District of Columbia who grew up with Matthews and helps tutor academy students. "He's that missing link between the two. Kids go down the street with their parents and yell, 'There's Peter Bug!' He's like a legend. He has a resounding commitment to individual achievement."

Matthews, who is like a neighborhood pied piper, followed by children wherever he goes, has unhappy memories of his own childhood. He had a speech impediment, was labeled a slow learner and spent years wishing for a full-time father.

"When people talked to me, I had to whistle, blink my eyes, kick my feet and stammer," Matthews recalled. "People got tired and stopped talking to me."

He said his father "used to come around and had a trash business. I thought he was gonna come to get me one day and I would be in the trash business with him," until he learned his parents were not married. "From then on, I said everything I do I've got to do for myself."

Matthews said his self-confidence mushroomed when he went to college and discovered he was not a slow learner. In his second year at Federal City College, his stuttering stopped.

Now, sometimes after midnight, Matthews strolls into neighborhood arcades and runs the teen-agers home. In the summer, he gives youths money to clean up broken bottles in the park next to the academy.

"I think sometimes they break the bottles so I can pay them, but I don't care if it's something I can do to get them off the streets."