It was right along here, in this deep crease in central Alaska's Chugach Mountain Range, that engineer Pete Fleming suddenly found himself nose down one night in the Susitna River.

Chugging along the Alaska Railroad through some of the continents's most spectacularly rugged wilderness, with his third mug of coffee at his elbow and a tape of country rock singer Willie Nelson blaring through the dining car, Fleming, 53, now shrugs off the derailment that tossed him and the freight train be was riding into the icy river a little over a year ago.

"We were going along fine," he recalled. "Then the mud started to slide and the next thing I knew we were in the drink." Nobody got badly hurt, said Fleming, "but it did give us a bit of a thrill."

The unexpected is nothing new for Fleming or his colleagues on the Alaska Railroad, the only full-scale railroad owned and operated by the U.S. government.

Not on a rail line where the engineer often tucks a .357 - magnum pistol under his belt to dispatch the moose who periodically stray onto the tracks and get pinned by trains. Or where passengers appear out of the thick spruce and birch woods on dogsleds to flog down a passenger run - and present a ton of dog food as their baggage. And not on a line where the wheels on boxcars left sitting in 60 degrees below zero sometimes shatter like glass when they're bumped.

But now, after weathering 55 years of near obscurity as one of the few competitive business ventures run on the open market by Congress, and even turning a modest $9 million profit for the taxpayers during its boom years while the oil pipeline was under constructioin here, the 650-mile raliroad is becoming something of an embarrassment to some federal transportation officials.

Revenues on the rail line have dwindled from a record high of nearly $55 million in fiscal 1976 to $35 million this year, while expenses have been steadily climbing. The state of Alaska recently cut off its passenger subsidy for the portion of the line that runs to Seward on the south coast, and the General Accounting Office audit, which is due to be released soon, is critical of some of the railroad's past administrative practices.

"What we have on our hands with this railroad is a highly unusual animal," said a Department of Transportation official in Washington recently. Eight years ago, he noted, former President Nixon attempted to unload the rail line on private industry because he said he felt it was an unhealthy example of public intrusion into the private business sector.

No serious buyer could be found then, and none is on the horizon now, according to federal officials. It would take an act of Congress to clear the way for such a sale,

But in the next year or so federal transportation officials say they are going to have to make some hard decisions about the line's future.

"The administration and the Congress will have to decide if the rail line is still providing a necessary service," said a Federal Railroad Administration spokesman. "If they decide it isn't, we wont' have any more Alaska Railroad."

Some officials say the railroad has outlived the 1914 legislation that created it to open up Alaska's interior. Today, the rail rout is paralleled both by modern highways and air routes.

On the other side of the tracks some state officials here would like to see the line expand to the Canadian border, a move that would turn Alaska into a major North Pacific port for the rest of the continent.

Under the 1914 legislaiton the president can build up to another 350 miles here if he chooses. But a 1,000 mile gap exists between the Alaska Railroad and the nearest Canadian tracks, and officials in British Columbia have been less than eager in recent years to complete the linking of the two.

In the absense of such a bonanza the Alaska Railroad makes do with mostly rebuilt equipment and more than a modicum of unique style. The line has only 51 engines, compared with 2,700 locomotives on the Union Pacific Railroad, and a dozen of the Alaskan locomotives are 1953 vintage which heve been put in mothballs.

Then there is Lee Woods, who quit her job last year running a restaurant in northern Idaho and now cooks on the woodburning stove in the gallery of the railroads passenger run. For $10.95 she will whip up the house specialty: reingeer chops, homemade soup, pie and coffee.

In the past, crewmen on the trains often did the shopping for residents who lived along the line's more remote tracks. Bush dwellers will flag a train down - it is the only railroad left in the United States that still makes flag stops - shove a newly killed moose into the baggage car, and haggle on the spot with the baggage man over the freight rate.

Such unusual touches lure hordes of tourists to the line in the summer, but on winter runs, like the one last week withe Pete Fleming at the throttle, only a handful of riders get on, pay partial fare and get off at unmarked stops deep in the woods.

For some people, like Peggy and Payl Stavenjord and their month-old daughter Rebecca, whose address is simply Milepost 4321, the railroad is the only way home.

"We live 14 miles from the nearest road." said Paul Stavenjord, 27, who was carrying a month's worth of groceries, some rifle and saw parts, and several new shovels back up the line. "If something happens to us the railroal is all we have to depend on."

Two years ago, when railroad officials tried to cut back on the line's passenger service and flag stops, angry residents of the wilderness along the tracks banded together and applied enough political pressure to get the order rescinded.

But last month, Alaska Railroad officials said they have to have the line's first operating subsidy or some service would have to go. William Dorcy, the railroad's general manager, asked for $1.5 million, but the request was rejected. Dorcy said the railroad's passenger operation lost $1 million this year, and would lose $1.3 million next year.

Dorcy took over the railroad's top job here last year, arriving on his first trip to Alaska during a two-year leave of absence from his job as senior marketing officer ofr the Missouri, Kansas and Texas Railroad in the Lower 48. He promptly slashed more than 400 jobs off the railroad's pipe-line-swollen payroll in a move that slowed, but didn't halt, the line's losses.

Still, Dorcy radiates a kind unbureaucratic and infectious can-do spirit that seems to permeate the line's remaining 700 employes.

"This is a proud railroad," he said, showing a visitor the rail line's Anchorage yards the other day, where workers were rebuilding almost from scratch several worn-out locomotives acquired for the Alaska line at cut-rate prices from other railroads.

"We may not be able to do some of the fancy things that a few of the big boys in the business are able to do," he said. "But then, I've lived in suburbs with more people than there are in all of Alaska. The remarkable thing is that we're able to operate a railroad here at all."