Mohammed Sider recalled on the witness stand yesterday that Frank A. Miranda wanted to retrieve an $800 gold nugget bracelet he had given as collateral for a $200 loan.

Testifying at the murder trial of three men in Montgomery County Circuit Court, Sider said Miranda asked him and two other friends to go with him last October to a Silver Spring apartment to get the jewelry.

Sider testified that he "freaked out" when two members of the group pulled out handguns -- one a .357 Magnum and the other a .44-caliber. Sider said that when he asked why the others had guns, one gunman responded: "They're like American Express cards, we don't leave home without them."

A short while later, Sider testified, the two ordered William H. Williams III, 19, and Earl M. Jerome, 18, to lie down on a waterbed in the bedroom of an eighth-floor apartment Williams and Jerome shared in the Silver Spring Towers building on Thayer Avenue, then shot each twice.

"I couldn't believe it," Sider said he told Miranda after the killings. "They don't have morals or nothing. They're cold-hearted."

Sider identified the gunmen as Kevin Hernandez, 27, and Anthony K. Wells Jr., 28. They and Miranda, 19, are each charged with two counts of first-degree murder in the Oct. 4 slayings. Prosecutors agreed to drop accessory-after-the-fact charges against Sider in exchange for his testimony.

According to police, the killings were drug-related and stemmed from an ongoing dispute about the repayment of $200 Miranda had borrowed from Williams. All of the defendants are from Northern Virginia.

Sider testified yesterday that Williams, who had taken Miranda's red 1988 BMW car, agreed to return it after Miranda promised to repay him.

Montgomery County Police Officer Wayne E. Cummings testified yesterday that he suspected the victims were involved in drug dealing because when he went to their apartment two weeks before the shooting he observed that it had no furniture or light fixtures. Cummings said he went to the apartment in connection with a stolen car complaint by Miranda.

Both Williams and Jerome were under surveillance by Montgomery police for alleged drug trafficking, according to court records. A police affidavit stated that "they used telephone pagers, had no gainful employment, paid back rent with $1,500 in cash and drove fancy cars which they rented and changed often."

Fred R. Joseph, Miranda's attorney, said his client was present at the shooting, but that Miranda "had no idea there was going to be a robbery or bloodshed."

Lawyer Paul F. Kemp, representing Hernandez, said his client was at home with his 7-year-old son when the slayings occurred. Eugene Wolfe, Wells's attorney, also denies his client's involvement. Kemp and Wolfe claim Miranda and Sider killed the two men.

Sider said Hernandez told Miranda he killed the two men because he feared retaliation for coming to take back the jewelry. "Hernandez said, 'We had guns on them,' " Sider testified. "They would come back and shoot you," he said.