An Old English sheepdog nestles in a corner, a red-brick fireplace and antique furniture combine to create the atmosphere of an 18th century home at The Woolgatherer Inc. That's part of what places this establishment near Dupont Circle a cut above most yarn shops.

Rows of brilliantly colored yarn line the walls of the shop like three-dimensional wallpaper. Baskets of knitting accessories surround a yarn wheel set in the middle of the room.

For proprietor Charles Higginbotham, 42, The Woolgatherer, 1502 21st St. NW, is more than just a business: It is a way of life.

"I try to translate everything around me in life into knitting," said Higginbotham, who considers himself an artist. With the yarns as his palette and needles for brushes, he strokes and weaves his fancies into garments of wool and cashmere, mink and silk that can sell for thousands of dollars.

A former dress buyer in a Florida store, Higginbotham came to Washington on vacation 15 years ago and "fell in love with the city."

"Whenever I fly into National Airport, I get goose pimples and tears in my eyes from looking down at all the different monuments, just as I did when I first came to Washington," said Higginbotham, a squarish man with brown hair curling around his ears. "This is the most beautiful place I've ever seen, and I can't imagine ever living anywhere else. After my first week here, I knew I had to make this my home."

He pays homage to Washington in the names he gives the items in his repertoire of handmade clothing: The Phillips Collection, National Cathedral, Library of Congress and Georgetown among them.

"This place is fantastic," said one of two women browsing in the shop recently. Smelling different yarns and touching them to their cheeks, they discussed knitting like veterans.

While the average knitter takes 55 to 60 hours to complete most sweaters, Higginbotham said he can produce even the most difficult garment in about 32 hours. His designs, on display in the shop, cover a range of styles for children and adults.

His sweaters bear no relation to the character of the institutions they are named for, he said, but instead are intended to elevate the image of fashion in Washington.

"There is a fashion industry here in Washington that New York City seems to neglect," he said. "By naming these garments after our great landmarks, it is my personal effort to call attention to our industry."

His yarns, many of them all-natural, are as diverse as his patrons. A garment of synthetic yarn can cost a few hundred dollars; sweaters and dresses made of silks and minks go for as much as the buyer is willing to pay, he said. The most expensive item sold by the shop--a small-stitched sweater-dress suit made of cashmere and silk--sold for $5,000, Higginbotham said.

"The man is an absolute master of color," said Barbara Cohen, sales representative of The Woolgatherer. "He sees a garment in its entirety before he starts knitting. Charles and The Woolgatherer create a family atmosphere, and if there's one place I would rather be other than in bed asleep, it is here."

A native of Indiana, Higginbotham grew up mostly in Orlando, Fla. He studied business and later music and finished a stint in the Army, then worked as a buyer for a department store.

The son of a grain elevator operator, he came to Washington in 1968 and made an unsuccessful attempt at operating an antiques shop in Adams-Morgan. He said he came to The Woolgatherer, a knitting shop then nearly 40 years old, in October 1972 and offered to help the owner, Wynne Gnam, who hired him.

"We had an understanding that I would have to learn to knit," Higginbotham said. "I immediately started taking lessons here and became so fascinated . . . that I never stopped." He bought the business in 1978.

"I've known Charles since the first time he came to the shop," said Margaret Greene, 82, who finishes garments for the store and taught Higginbotham about knitting. "From the begining he was very talented."

A bachelor, Higginbotham spends his spare time lecturing on knitting, teaching classes at The Woolgather or in his town-house living quarters above the first-floor shop.

Knitting is more than a trade, he said, it's "therapeutic."

"Many people will say they're too impatient to learn knitting, when they ought to say I should learn to knit because I'm impatient. The calming sound of the whistling spinning wheel coupled with the feeling of creating something from nothing with their own hands must have a positive effect on them."

He is untroubled by the stigma some attach to men who knit, he said. About 5 percent of his customers are men who were knitting before they found their way to his shop.

"Whenever I'm on a plane, train or bus, I never have to worry about people bothering me. They see a man knitting and I guess they assume I must be deranged or doing it for some sort of mental therapy," said Higginbotham, who can often be seen by passers-by, sitting at his store's front window working diligently on a new creation.

"When I've knitted my last stitch and the time has come for me to lay down my needles, let it be said that Charles M. Higginbotham . . . had a great sense of humor and got through it all with a laugh. I hope my enjoyment of my profession will carry over to others who knit."