Steve Aylestock sat in the meticulously decorated living room of his renovated turn-of-the-century row house at Fourth and Q streets, on the fringe of Washington's riot-scarred Seventh Street corridor and half a mile from the junkie-lined sidewalks of 14th Street NW.

A Doberman pinscher whined for attention from behind the kitchen door. But Aylestock ignored it, as he focused his thoughts on that day in late January when burglars invaded his home for the second time -- one month to the day after the first burglary.

"They ransacked the upstairs. I was asleep down here and found everything gone in the morning," Aylestock recalled. "I said that's it. No more. We're getting out."

His wife Karen was nervous now and clutched her fingers as she remembered the nightmare that shattered their dream of staking out a new life in a once rat-infested slum neighborhood that they had hoped would soon become the next fashionable address of Washington's urban reawakening.

"I really hate it here," Karen Aylestock said intensely. "I really hate it. We knew it wouldn't be a picnic, but this is worse than we expected."

As soon as the Aylestocks can sell the house they purchased only two years ago, they will drop out of the urban pioneer movement and move to Arlington -- casualties of the war in Shaw, the last and bitterly contested frontier on Washington's downtown housing market.

On one side of this struggle is New Shaw -- the middle-class renovators, both black and white, who have sunk their money and futures into the once-decaying Victorian row houses of this neighborhood.

On the other side is Old Shaw -- the poor, the aging, the forgotten, those with nowhere else to go, those accustomed to but not enamored of the loud voices, the all-night music, the constant scream of sirens and the relentless crime that drives out the newcomers.

The battle for Shaw is a turf fight that is far from settled. Its outcome will help determine the future of Washington, where sharp population shifts during the past few years have changed the face of the city.

Unlike Capitol Hill, Dupont Circle and Logan Circle, where restoration fever swept from block to block, changing one-time slums into chic and monied neighborhoods almost overnight, the newcomers hit Shaw in scattershot fashion.

On some blocks, there is only one new family. On others, there are as many as 10. In the 80 blocks that make up Shaw, realtors estimate, as few as one-third of the houses have changed hands.

Shaw was attractive as the last -- and cheapest -- way to get in on the intown movement. Sales were brisk between 1975 and 1979, according to realtor Gay Thompson of Victorian Real Estate.

But a year ago, inflation and speculation drove prices higher than many were willing to pay. The influx of newcomers slowed without even waiting for the soaring interest rates of 1980 that at one point ground all other real estate sales to a virtual halt.

"A few years ago, you could by a crackerbox in the suburbs for $40,000 and we were offering mansions for $20,000. They were easy to sell," said Thompson, who has been selling houses in the area for the last five years. "When prices started matching suburban prices, Shaw didn't look that much better anymore."

Rhea Radin, a 20-year veteran of Washington real estate and herself a pioneer on Capitol Hill, has a rule of thumb about transitional neighborhoods. "I always say if you get four houses in a block renovated, you've got the whole block. People are attracted by activity and then they see the block as okay," she said.

In Shaw, the rule doesn't appear to be operating. Best estimates are that another 10 years are needed for Shaw to become a comfortable neighborhood for the new settlers.

Many people, like the Aylestocks, who were among the first newcomers on their block, have decided not to wait. "We didn't know how brave we were being when we brought here," said Karen Aylestock.

Others, however, have steeled their nerves and decided to stay.

Dan and Paula Zimmerman, for example, are renovating a detached, 100-year-old mansion that has windows eight feet high. So far, they have spent $110,000 on renovations. They paid $40,000 for the house.

In September 1976, Zimmerman, a 31-year-old government computer analyst, was shot during a robbery attempt half a block from his home.

The bullet entered his side, exited through his back and left Zimmerman more determined than ever to stay in Shaw.

"I came here as a laid back liberal. And that didn't work. When I was laying there on my living-room floor bleeding for 45 minutes, I got scared and then I got angry. I have a right to live here. I decided then that I wasn't going to leave with my tail between my legs," said Zimmerman.

"When my husband came out of the hospital with two holes in his body, he went right back to work on the house," Paula Zimmerman said. "That was it for me. I decided no one was going to drive us out of here. They're going to have to kill me to get me off this block. We've put blood, sweat and tears into this house."

In many ways, the conflict in Shaw is an economic one. But there are delicate racial overtones to it, because many of the newcomers are white and most of the longtime residents are black.

Some white renovators use code words when speaking of aspirations for their newly adopted neighborhood. Some say they would like it to be "like Georgetown" or others would like it to be nicer.

"Nicer" and "Georgetown" translate into white middle-class.

Dudley Gregorie who renovated a house on the 400 block of M Street NW. said, however, a simple racial analysis would be ill-founded. "There is a lot of resentment here against whites moving in. But there is also a distrust of anybody new, black or white." "I fit in pretty well. First I'm black and second I have no bars on my house. There were no bars when I moved in and there are none now," he said. "I got my christening right after I moved in. And that was my only robbery. The kids come and go here. I rarely lock the door. They know there is nothing to steal."

"Another black renovator who bought his house with a white partner lives seven blocks away at Sixth and Q streets NW. Their first introduction to Shaw was a rude one.

"This woman walked up to me when we looked at the house and said 'If you've come to renovate. I'll shoot your ass,'" said Gill Gerald, an architectural designer who moved to Shaw two years ago. They bought anyway. Now Gerald is president of the Shaw-Downtown Neighborhood Association and he says that the woman has come to him to help her keep her apartment.

Community leaders in Shaw are proud of the history, diversity and vitality of this neighborhood. But they are also aware of the tensions building with the influx of pioneers into what for the last decade, has been a low-income, all black neighborhood.

"Pioneers think they have moved to a jungle and that pioneer philosophy is unfair," said two-term Councilman John A. Wilson, who represents the area. "Black people in Shaw have been struggling for a long time. If white people don't want a mixed neighborhood, they're not going to ever be happy there."

Wilson said he is particularly concerned about the two well-established centers for drug traffic at 10th and O streets and near Zimmerman's house at Fifth and M streets NW.

"Nobody likes that drug traffic, neither the blacks nor the whites. We're working very hard to get rid of it," said Wilson. "But we can't put a policeman on every corner. You have to be like the guy who got shot [Zimmerman] and say I'm going to stick it out."

Charles Mason, an advisory neighborhood commissioner in Shaw, said the new pioneers would do well to turn to their neighbors for help in the battle against crime.

"Those Maryland and Virginia pioneers solved problems before in their own community," he said. "They come here and they turn to the police and the elected officials for help. They fortify their houses and try to be an island. You have to come out of the fortress and talk to your neighbors."

"We want to eliminate crime in Shaw because of the moral viewpoint and not for the convenience of the new taxpayer in their $100,000 house," he said. "We welcome them on an equality basis but not on a plantation basis."

Wilson and Mason both said they see a bright future for Shaw, but that future is least five years away.

"If we hold out for five years against the big money and the big developers, we'll be okay," said Mason.

Dan Steel, a D.C. police detective who grew up in Wheaton and now lives at Third and R streets NW, tried to loosen the tension of living in the neighborhood through personal friendliness.

"I'm gregarious. I reach out to people. Maybe it's the gun and the badge that makes me feel so comfortable. But I really think that this is just a good neighborhood. A good place to live," he said. "But you have to have a pioneer attitude, or the Indians will get you."

The Indians are just what worries Steel's wife, Doris. "It's terrible to be in a place and know you're not wanted and you're going to get hurt," she said. "You can't be soft in a neighborhood like this. You have to be tough."

Doris Steel grew up on the District border near Mount Rainier. "It was very much like country there. I think of that openness as a back door," she said. "I remember the riots and you have to have a back door to get out. There is no back door here."

Talk of the recent Miami riots and the expectation that budget cuts could adversely affect police coverage in the city make many Shaw residents nervous. a

"We have a terrible fear of riots," said Karen Aylestock. "Miami put the fear of God in us. It is my worst fear to be in Shaw during a riot."

Another renovator, Barry Mackey left his heavily barred and elaborately alarm-rigged house to walk a visitor to her car recently. Looking slowly up and down M Street near 4th, he said, with resignation, "If there's a riot here, we're sitting ducks."