An Alexandria man was charged yesterday with felony murder while armed in the death of Dennis Dolinger, the Capitol Hill community activist and anti-crime organizer found stabbed to death inside his home last week.

Police said Steven Craig Watson, 44, of the 1500 block of King Street, was arrested by Alexandria detectives on fraud charges Wednesday after he allegedly used Dolinger's debit card at a hair salon and another shop in Alexandria. District police obtained a warrant yesterday charging him with murder.

D.C. police Cmdr. Kim Dine said the motive behind the crime remains a matter of investigation, and he declined to describe the evidence against Watson. He said investigators were trying to determine whether Dolinger and Watson knew each other or whether Dolinger, 51, was the victim of a random attack.

Dolinger's death a week ago touched a nerve in his Capitol Hill neighborhood, near the Potomac Avenue Metro station. The retired budget analyst was a familiar presence at community meetings and was head of the local Orange Head Patrol and an advisory neighborhood commissioner. More than 200 neighbors and friends attended a candlelight vigil in front his home in the 1500 block of Potomac Avenue SE last weekend.

Police discovered Dolinger's body about 4:15 p.m. June 4 after responding to a report that a man had been shot in the head. Police said Dolinger had suffered several puncture wounds to his head. There was no sign of forced entry, police said.

According to court records, Dolinger's Chevy Chase Bank debit card was used at the Pazazz Hair Salon in Old Town Alexandria less than 24 hours after his body was discovered. D.C. homicide detectives identified Watson as a suspect after interviewing the salon's manager, Perry Banibashar.

"I've seen him hanging around outside my shop for the last few years or so," Banibashar said of Watson yesterday. "He's a disabled person, living on welfare. . . . It's hard for me to believe he could have the strength to kill somebody."

Banibashar said he has seen Watson begging on the streets for money. On Saturday, he said, Watson showed up at the salon and tried to sell him some clothing and other items, then returned later in the day and asked for a haircut.

Watson used Dolinger's debit card to pay for the trim and to pay back more than $100 that Banibashar had lent him in recent months, Banibashar said.

"He said the person who owned the card was going to give me a call," Banibashar said. "But I never got a call. I was still waiting when he came back a few days later to borrow money again."

Alexandria and D.C. police officers arrested Watson and searched his apartment in the 1500 block of King Street on Wednesday. A law enforcement source said that detectives found Dolinger's health card, Safeway card, Social Security card and other cards and that they also removed a pair of blue jeans, a belt, a wallet and a pair of knee pads.

Watson was ordered held without bond in the Alexandria jail on the credit card charge pending extradition to the District.

CAPTION: Dennis Dolinger was an advisory neighborhood commissioner and headed an anti-crime patrol.