WHEN JOHN C. LAWN, the head of the Drug Enforcement Administration, wants to get a sure laugh inside his agency, he says "We've turned the corner."

"What can I tell you, we've turned the corner," Lawn quips, as an aide recites record-setting arrest statistics at a recent meeting in Washington of the two dozen top officials of the DEA. They all laugh. "We've turned the corner again," he says in Ft. Lauderdale in remarks to 58 supervisory agents from the DEA's huge Miami Division. They all laugh. He says it at a conference in Toronto of the special-agents-in-charge of the 20 DEA field offices in the United States and Canada, and again in Vienna at a gathering of senior DEA agents from Europe and the Middle East. More laughter.

The "corner" in the drug war hasn't been turned, of course, and claims to the contrary have been a quiet gallows joke in federal law-enforcement circles since at least 1973 when President Richard Nixon, in all seriousness, proclaimed publicly, "We have turned the corner on drug addiction in America," a statement that proved to be incorrect in the extreme. "We've turned the corner" remains the DEA's internal laugh line today because it expresses -- in a stab of bitter, dark humor -- the frustration the DEA feels as the lead law-enforcement agency in America's frustrating war on illegal narcotics.

Measured by the usual standards of law-enforcement effectiveness -- arrests and convictions of significant criminals -- the DEA is a phenomenal success. But when judged by the more fundamental question of whether the nation is winning the war on drugs, the agency must be rated a failure. The failure is so pervasive and urgent, in fact, that the DEA is launching a new, alternative strategy -- a dangerous, highly classified, when-all-else-fails effort to stop drugs overseas, at the source.

In a dichotomy perhaps unprecedented in the annals of American law enforcement, most current statistics of both success and failure in the drug war are records. Nearly two decades into America's second and worst narcotics epidemic (the first lasted roughly from 1885 to 1920), drugs have spawned perhaps the most virulent crime wave in U. S. history. Some 12,395 people arrested by the DEA were convicted of drug crimes in the fiscal year ended last September 30, up from 5,580 in 1981. Drug criminals comprise more than a third of the federal prison population, a growing percentage and by far the largest single category (robbery, at 15 percent, is second). Drugs are behind a recent murder wave in Washington and spawn robberies and killings in cities across the country.

The harder the DEA pushes, the more drugs seem to enter the United States. Last year, DEA agents seized nearly 40 tons of illegally imported cocaine in the U. S., up from two tons in 1981. They also seized 682 illicit drug-processing laboratories, almost four times the number of labs seized six years earlier. They confiscated just over $500 million in cash and other assets belonging to drug traffickers, more than the DEA's entire budget for 1987, as well as 4,964 firearms, including 249 automatic weapons. On their face, these statistics reflect an exceptional achievement -- a deft melding of new laws, bigger budgets, and the skill of thousands of people. Yet they are a profile of defeat.

Despite one of the largest mobilizations of law-enforcement power in history, America's drug problem is worse than ever in many respects, and worse overall than in any other nation in the industrialized world.

One in six working Americans uses drugs regularly, and the problem is even more acute among the unemployed, the poor and the young, especially school dropouts. More drug-addicted babies are being born than ever before. Cocaine is more readily available in the U. S., and at a lower cost, than in several years. The 40 tons that the DEA seized last year are believed to represent only a small portion of the total smuggled into the U. S. Meanwhile, the narcotics mafia of Colombia, the source of most cocaine, continues to function freely and appears to be stepping up a campaign of terror against Colombian government officials who try to combat it. On Jan. 25 the drug mafia kidnapped and assassinated Colombia's attorney general, the latest in a series of extraordinarily brazen acts of violence.

The DEA's efforts to combat the drug epidemic have been hampered by two factors that make the battle singularly difficult:

Drugs aren't simply a crime problem, like bank robbery or income-tax evasion. Drugs also are a public health and medical problem, and, in a larger sense, a social dilemma that seems to invite a variety of possible approaches such as education and therapy having little to do with law enforcement. Until the demand for illegal drugs eases, the DEA's efforts to reduce the supply may be doomed to failure.

The drug war has also been a bureaucratic turf war. Partly because of the lack of consensus on how best to attack the drug problem, the government bureacracies responsible for fighting drugs haven't received the kind of stable political support the FBI and IRS get in waging their more conventional and less controversial wars.

Federal narcotics agents in the U.S. have carried a total of 30 different badges in the nearly three-quarters of a century since the federal government outlawed drugs in 1914. After decades of intermittent scandal, malfeasance and mismanagement, the DEA emerged in 1973 when the Nixon administration, responding to a narcotics epidemic already well underway, created a new "superagency" from several contending agencies. The result was paralysis at the top of the narcotics bureaucracy. Internecine warfare raged. The new agency had three heads in its first three years. It took most of a decade, and the new, younger blood that came with attrition, to begin to heal the old animosities and allow the DEA to funciton with any degree of institutional stability and effectiveness. In 1981, the FBI, which had shunned drug responsibilities under J. Edgar Hoover for fear that they would corrupt the bureau, agreed to accept "concurrent" jurisdiction over drug enforcement.

During the Reagan years, the drug bureaucracies at large have continued to expand. In addition to the DEA and FBI, 11 Cabinet departments and about three dozen agencies currently are involved in the drug war at the federal level -- the State and Defense Departments, the CIA, the National Security Agency, the Department of Health and Human Services, the Department of Agriculture, the Customs Service, the Immigration and Naturalization Service, the Coast Guard, and many others. And of course state and local governments and a myriad of private groups are in the fight as well.

The DEA, as the primary agency for both investigations and intelligence and a leader in drug education, is at the center of the fight, and its recent growth has been explosive. From 1979 through 1987, the DEA's budget rose an average of 32 percent annually to about half a billion dollars, the only major agency outside the Defense Department to get such increases, as Congress and the White House strove to meet the drug epidemic. But since the dramatic increases in arrests, convictions, and confiscations of drugs, money and property in this country have failed to reduce drug abuse. And since severe prison-overcrowding poses the distinct possibility that there will be no place to put newly convicted drug offenders, the DEA is beginning some new efforts to stop drugs at their overseas origins.

In concert with the State Department and other agencies, the DEA is launching a major and highly sensitive inititative in South and Central America to try to disrupt the manufacture, processing, and shipment of cocaine before it leaves the so-called "source countries" such as Colombia, Bolivia and Peru.

The DEA is in the early stages of training between 150 and 200 of its own special agents for duty with antinarcotics teams assembled from the police and armed forces of about a dozen Latin nations. In Bolivia and Peru, the first wave of DEA agents is already participating with the teams in raiding clandestine jungle cocaine laboratories, disrupting shipments to and from the labs by air, river and other means, and collecting and coordinating intelligence on the cocaine traffic in the region.

In recent months, U. S. sources say, the joint teams (and in some cases all-Latin teams acting partly on DEA intelligence, have seized several tons of fully processed cocaine and destroyed labs, processing facilities, chemicals and ingredients capable of producing considerably more cocaine than was seized in the United States during all of last year. The authorities believe that the techniques being employed in the operation hold the possibility of reducing more effectively the amounts of cocaine reaching the U. S. than other methods have.

The new venture, which is scheduled to last indefinitely, builds on the DEA's experience with a number of previous operations that were somewhat similar but much smaller, including one in Bolivia in 1986 that was terminated after four months.

U.S. agents so far have suffered no casualties in the current effort, though there have been some close calls. Just last week, three DEA agents and a Bolivian police unit that was in the midst of arresting a drug pilot and seizing his wares, were attacked by a large mob of angry, rock-throwing coca farmers. A few shots were fired but the joint team was rescued by helicopter and an armed Bolivian military convoy before anyone was seriously injured.

In foreign enterprises, such as the new Latin initiative, the DEA is making greater use of its little known but potent network of foreign agents, intelligence analysts and informants -- and its 93-plane air wing. Apart from the new contingent in Latin America, the DEA currently deploys 211 special agents in 65 foreign cities, more than twice as many agents as all other civilian U. S. law enforcement agencies combined station abroad. For example, there are 18 DEA agents in Bogota, 10 in Mexico City, 18 in Bangkok, four in Paris, three in Istanbul.

"As an intelligence network on international drug trafficking, the DEA (is) unparalleled," writes Ethan A. Nadelmann, an assistant professor at Princeton University's Woodrow Wilson School of Public and International Affairs, in a soon-to-be-published book on international law enforcement. "In a few countries, most notably in Latin America but also in those countries where governments are not on good terms with the United States, the DEA agent's access may exceed that of both the (U.S.) ambassador and the CIA."

Panama has tarred unjustifiably the DEA's generally good record abroad. When Gen. Manuel Antonio Noriega, the Panamanian dictator, was indicted by federal grand juries in Florida on drug charges, he defended himself in part by displaying letters from DEA chief Lawn and other U.S. officials commending his supposed antidrug efforts.

The Noriega affair illustrates the seamy world in which the DEA must operate -- and critics' naivete about the murky, constantly shifting reality of the international drug war. The DEA finds it necessary to deal routinely and often with many unsavory characters in its worldwide effort to inhibit narcotics traffic. Gen. Noriega turned out to be one of those characters, and the DEA long has been aware of his likely involvement in illegal activities. As Noriega was helpful in particular DEA operations, which he demonstrably was on occasion, the agency thanked him -- in letters known within the DEA as "attaboys" that essentially were formalities. But when hard evidence of his criminality -- usable in U.S. courts -- mounted relatively recently, it was the DEA's own lengthy investigation that underlay a large part of his indictment.

The DEA also has aggressively investigated official misconduct in Mexico, where, as in Panama, the U.S. has a sensitive, multi-faceted relationship comprising far more than narcotics policy. Even more than Panama, Mexico has allowed itself to become a major source and conduit of illegal narcotics and associated violence that has demanded urgent U.S. attention.

The 1985 torture-murder of Enrique Camarena Salazar, a U.S. drug agent stationed in Guadalajara, has obsessed the DEA, which has conducted an intensive investigation of the killing and related events. A federal grand jury in Los Angeles early last month indicted nine people, including two reputed Mexican drug lords and three Mexican police officials, for complicity in the murder. The DEA's investigation, made despite inaction, obstruction, and outright corruption in Mexico, provided the evidence to support the Los Angeles indictments.

In Panama, Mexico and elsewhere, the DEA's choice -- which must be exercised daily and pragmatically in hundreds of ambiguous, difficult situations -- is a choice between working in, around, and through an environment of pervasive corruption to accomplish something positive, or withdrawing and accomplishing nothing. The DEA has consistently chosen the former course.

The agency's reputation spans ideological boundaries. Although they once portrayed narcotics as a symptom of capitalist decadence, the governments of the Soviet Union, the Peoples Republic of China, and other communist-bloc nations over the past year or two have quietly asked the DEA's help in combatting their own drug traffickers and in training officers of their governments in drug enforcement skills. Some training already has been completed, and the USSR, China, and several Warsaw Pact governments have begun to share intelligence with the U.S. and other Western nations that has resulted in the seizure of illegal drugs and the arrest of traffickers.

For years the DEA has tried to live down a somewhat reckless "cowboy" reputation, stemming from the early 1970s when federal drug agents perhaps were best known for their occasional "knockless searches" of what turned out to be the wrong residences. They're not cowboys, but fictional portrayals of their work usually understate just how difficult it is. DEA agents work under cover most of the time, making many arrests during the commission of the crime. As a result, drug law enforcement is considerably more dangerous than most other types, and DEA agents are much more likely to experience a violent episode than are officers of any other federal law enforcement agency. Two DEA agents were killed in a gun battle with alleged heroin dealers in Los Angeles on February 5. Two agents died in the line of duty in 1987 and a number of other have been wounded or injured while making arrests or seizing booby-trapped drug labs.

As the drug war on U.S. streets and in South American jungles grows more violent and preoccupying, we risk losing sight of the DEA's less-visible but equally urgent mission -- education, which most experts consider an essential long-term key to reducing drug abuse. The DEA's Sports Drug Awareness Program provides guidance and training in drug education to the nation's 48,000 school athletic coaches, who in turn are in direct touch with over five million youths, many them role models in their schools. This and similar federal programs, though vastly underfunded by the Reagan Administration, may be contributing to the possible recent decline in cocaine use among high school seniors.

Although Americans broke a devastating drug habit in the 1920s, it's more difficult this time. The drugs are more numerous and varied, the criminals far better organized and financed. Only with the strongest commitment to curbing both supply and demand -- through dogged, discriminating worldwide law enforcement and pungent, well-focused drug education -- do we stand a chance of turning the corner.

David McClintick, the author or "Indecent Exposure: A True Story of Hollywood and Wall Street," is writing a book about federal law enforcement to be published by William Morrow and Co.