The children begin climbing up to "Aunt Elisa's" at 8 a.m., when a sea breeze blows over the mountainside and the alleys of Rocinha are filled mostly with stray dogs or gaunt men selling fruit from wooden crates.

They arrive over the last ridge in disarray: barefoot, distracted and trailing muddy sticks or cloth bags they will later use to carry shoe polish to the wide sidewalks of the business district.

This one room near the top of the mountain -- with its few old desks, tin roof and patchwork walls of driftwood held up by tree branches -- is their school. And Francisca Elisa Medeiros Pirosi -- Aunt Elisa in the vast slum of Rocinha -- is making a reputation for teaching these rejected childen to read.

Her school has no official accreditation, and Pirosi has little formal education. But in a country where 25 percent of the adult population is illiterate, Pirosi's method is being cited as an example of Third-World innovation, and her ramshackle room has been bolstered by grants from the United Nations Children's Funds (UNICEF), the Brazilian government and the local American school.

"This is my palace," Pirosi says in a conspiratorial whisper, and wraps two wiry arms around a pupil. In Rocinha, where more than 75,000 of Rio de Janeiro's destitute live in shacks built straight up a lush green mountainside, she is right. Only one public school is available for the more than 10,000 children in the district, and many families cannot afford even to try to use it.

"There isn't money for uniforms and supplies," Pirosi said. "And the children are needed to fetch water from the wells, to help at home, to work in the streets during the day. Any child who has a problem -- there are many here -- is not allowed in the public school, anyway."

Pirosi's answer has been to operate a simple series of classes, allow children to freely come and go through the day and night and tailor her lessons to the special problems and interests that poor children have.

Hers is the model of the informal, community organized school, the only hope of education for much of Brazil's poor urban masses.

"It is a different answer to a special situation," she said. "This is a situation terribly difficult to work with. There are so many social problems, and so many children are lost. It takes a lot of improvising, a lot of creativity."

Since opening her school in 1980, Pirosi says, she has advanced about 50 children to the second grade of the public school, including some who were once rejected because of retardation or behavioral problems.

In three more months, she will "graduate" 28 more, and a total of 80 now come to her shack in shifts between 8 a.m. and 10 p.m. With "rhythm and compassion," she says, she can guide a willing child to semi-literacy in as little as 15 days.

It is a work of great pride for Pirosi, a 43-year-old mother of two who worked as a domestic servant and a seamstress before becoming a teacher. Born in the poor, rural Brazilian northeast, Pirosi had only one year of schooling before she married.

Eighteen years ago, like tens of thousands of others from the northeast, Pirosi and her familiy moved to the Rocinha slums at the edge of Rio in hopes of finding better work in a rapidly industrializing Brazil. Built up over a beach that has recently been lined with new luxury condominiums selling for $500,000 each, Rocinha has changed little since the Pirosi's arrived.

"It's only gotten bigger," she says.

"There is a lot of everything in Rocinha," Pirosi said. "A lot of poverty, a lot of hunger, a lot of crime, repression, all the problems."

Pirosi's own work in the area started suddenly and unexpectedly, when one of her daughters interrupted her sewing work for help in reading. Pirosi set out to make her own children literate, and was so successful -- her oldest daughter is now in the public school's sixth grade -- that neighbors and friends began asking her to teach their children to read.

With that, the idea of a school was born. Pirosi says she spent six months raising contributions and looking for help before a group of people gathered together one weekend and raised her schoolroom with prized pieces of salvaged wood and a strip of surplus tin.

Then, Pirosi says, the real labor began. She accepted all children who would come to her room for a few minutes a day, including more than a dozen who were rejected from the public school for retardation or other handicaps. They pack the dark room on a busy morning, engaged in a dozen different tasks and in various stages of literacy -- from writing sentences to sputtering out the phonetic sounds of the alphabet.

Pirosi says she tries to have the children learn only one thing by rote -- the five standard vowels, identical in Portuguese and English. She then works them through consonant by consonant phonetically, identifying the look of each letter with something familiar. Charging about the room, mimicking the form of each letter with her body while all make its sound, Pirosi turns an s into a hissing snake, or a q into a man looking back over his shoulder.

"The method just seemed natural to me," she said. "All of it was just trying to get children to pay attention and remember it."

Perhaps most importantly, Perosi's homespun technique is mixed with an intimate affection for her neighbors and their families. Rather than stand at the head of her class, she seems to spend most of her time moving from student to student, hugging them affectionately, and sounding letters into their ears in hope of a response.

When further encouragement is needed, she often simply sends one of her students through the maze of dusty alleys along the mountainside to fetch a father or brother to the school. She knows all the families and their work, and who can spare an hour to supervise a drawing exercise or repair the fragile electricity line to the shack.

After several years of working by herself, Pirosi was discovered by UNICEF through relief workers in Rocinha. The organization gave her a grant of about $50 last year, plus a blackboard. Other donations for the school soon came in: a collection of old but sturdy school desks from Rio's American school ("the very richest," Pirosi stresses), and this year, a grant of about $75 from the city education department.

Pirosi is not counting on government aid to keep her school going or open new facilities in Rocinha, though. In fact, after this election year, she says she doesn't have much hope that the government will renew the grant to her school to pay for pencils and paper and her lost income as a seamstress.

Instead, she says, she is hoping community leaders in Rocinha will organize to keep her school going and open a string of new ones for the thousands of children still in the streets.

"It is the only solution," she says. "We have to do our own work and build our own resources. And when we have 10 or 20 schools like this here, there will be no way they will be able to ignore us."