The basement of the Mount Pleasant house where nine people died in a fire early Sunday was well-known in the neighborhood as a place where liquor was always available and loud parties lasted well into the morning hours, according to neighbors.

It was after one of those nightlong binges, neighbors said, that the fire occurred, killing seven itinerant Salvadoran laborers and two local women. Seven people, including four children were injured.

"It was always the same crowd . . . " said Ranka Nicholas who lives next door. "They would sleep on the street or anywhere. None of them were bad people, they just always drank, but they didn't bother anybody."

Police, fire and utility officials said yesterday the blaze, which started in a small utility closet containing a water heater and furnace, was apparently accidental, but that the exact cause of the fire is still under investigation.

A spokesman for the D.C. Medical Examiner's office said the nine victims, most of whom were between the ages of 28 and 35, died of smoke inhalation. Most were found slumped against the basement back door.

Police investigators blamed heavy drinking for the large death toll, saying it impaired some occupants' ability to escape.

Seven of the victims have been positively identified, the spokesman said, but police said their names were being withheld pending notification of relatives.

One of the women who died in the fire was Terri Williams, a 20-year-old mother who had dropped out of high school and had been spending most of her time at the house at 1629 Irving St. NW. Melissa Cole, the second woman, was recently persuaded by District social services workers to leave her young daughter with relatives following a court order, because of the living conditions in the basement, police sources said.

Williams' brother and sister sat in a parked car outside the charred shell of the Irving Street house yesterday, trying to make some sense out of how their younger sister's life had ended.

They said their mother will now care for Williams' 14-month-old daughter since the family does not know the child's father, a Hispanic who befriended Williams while she lived at the house.

"Terri was confused," said her brother Eddie Williams. "She didn't know what was what. She looked at these people as her friends, but we thought differently.

"We always tried to get Terri help," added Williams, who said his sister dropped out of school after the 11th grade and had once committed herself to St. Elizabeths Hospital for the mentally ill.

"She called from the house Saturday night and said there was a party here and she would be home later," her sister Chrisenda recalled.

City officials said they believe the house was overcrowded, and may have been in violation of city housing codes.

But Cheryl Jamison, spokeswoman for the District's Department of Consumer and Regulatory Affairs, said, "Single family dwellings are not under our jurisdiction and we do not inspect them unless we receive a complaint."

Mercedes Ross, who along with her husband and two small children rented the first and second floors of the house also returned yesterday. She is eight months pregnant and came to search for a suitcase she had packed for her trip to the hospital.

"I lose everything, but I have my life," Ross said.

Meanwhile her husband Laurent Ross, a researcher at American Council on Education, sat at a friend's house tracing the path that led to his becoming a reluctant landlord and his family's house becoming a haven for transients.

The Ross family began renting the house in May 1984 and Laurent Ross said he collected rent from the men in the basement but did not know them.

"I only rented the upper portion for $500 a month . . . ," said Ross. " The landlord had an agreement with the people below . . . and they paid $250."

Two couples had been living in the basement but they moved out in mid-December and a group of men had moved in without his permission, Ross said.

"I told the owners I had a bunch of drunken bums living here," he continued. Koula T. Harris of Bethesda who owns the house, "came down and we found 16 guys down there, four dead drunk on the floor, the apartment in shambles," Ross said. Harris would not comment yesterday.

Ross said he was trying to evict the men but "I didn't want to put them out in the winter. I said I would wait until March 1.

The injured included Romeo Berrios, who was in serious condition last night suffering from smoke inhalation and burns, and Mario Benavides, who was in fair condition suffering from smoke inhalation at the Washington Hospital Center. Ross' son David and another 2 1/2-year-old boy who hospital officials declined to identify, suffered smoke inhalation and were listed in good condition at Children's Hospital. Two other children and a D.C. firefighter were treated and released.