Dennis H. Marshall, a former member of the Maryland House of Delegates, pleaded guilty yesterday to two counts of fraud in connection with a scheme to sell stock in a company and use 20 per cent of the proceeds to pay personal debts.

A statement of facts signed by Marshall states that he and a former Virginia House of Delegates member, Wallace G. Dickson, started a farmer's market in Alexandria last June called Producer and Consumers Cooperative Exchange, Inc. Marshall said he sold blocks of stocks in the company to 29 investors at $1,000 each. Five of the investors were retired Army colonels and one was an Army major general, according to Marshall's statement.

Marshall used $1,500 of the investor's money to pay his landlord for back rent and $492.06 to cover his girl friend's delinquent Garfinkel's account in addition to other debts, accoring to the statement of facts.

Marshall, 40 was elected to the Maryland House of Delegates as an Independent Democrat from Prince George's County in 1962. He lost a re-election bid in 1966.

Marshall is scheduled to be sentenced July 12. The maximum penalty for each offense is 12 years in prison and a $1,000 fine.

Dickson, who was indicated with Marshall last November, is awaiting trial, according to Alexandria Assistant Commonwealth's Attorney John Greenbacker Jr. Dickson, 45, a Democrat, represented Arlington during two terms in the Virginia House of Delegates from 1966 to 1970. He did not seek re-election to a third term.