The old man had finished his dinner at Sholl's New Cafeteria yesterday and was dabbing his mouth when, suddenly, his napkin moved to his eyes. For the past 20 years, he had been what restaurant manager Ed Sholl called a "die-hard regular," and now his favorite spot in the whole world had closed its doors.

"I met my wife at this very table," said James Turpin, 68, a retired postal worker, his teary eyes beaming with pride. "I'll have a lot of memories locked up in here."

Around the room, other regulars quietly ate their last meals at Sholl's cafeteria, finishing up with goodbye handshakes, kisses and tears. Sholl's, after 34 years on the corner of Vermont Avenue and K Street NW, was moving to Rosslyn. After the restaurant owners had a lengthy, bitter fight with powerful real estate magnates to keep its lease, modernization won out over tradition, and Sholl's had to move.

"We had 3 1/2 years to go on the lease, but I must admit there was a foreclosure clause in it and for some reason it came up," a despondent Sholl said between bidding his customers farewell. "We offered to renegotiate for higher rents; we offered to close down for six months so the building could be renovated. But they just told us out and out, 'Get out. We don't want you here.' "

When Sholl's opened its Vermont Avenue restaurant in 1950, downtown Washington was an old-fashioned place, replete with ornate buildings fashioned in time-honored architectural traditions. Sholl's stood out as modern and almost swank by comparison, with huge picture windows affording every customer a view of the city's genteel street life.

But times were changing. Over the years, wrecking crews went about their deafening work, making way for places like Yummy Yogurts and stuffed-croissant shops. When the dust had settled, however, Sholl's still stood as the only conveniently located restaurant where roast turkey and dressing could be had for $1.65.

The cafeteria, located in the center of town and only a brief walk from the White House, became well known among tourists. But what made it an institution was its regular clientele, a hearty mix of frugal and dignified old folks who managed to turn it into one of Washington's most successful cafes.

Dressed in lace and old hats, pea coats and ventilated shoes, shuffling along with canes, carrying used shopping bags filled with books, lint ball sweaters and spirits by the quart, they found refuge in Sholl's as the city changed around them.

"The place is clean and the vegetables are fresh," said Catherine Collins, who calls herself a retired housewife. Her Sholl's table mate for 10 years, Frances Adams, a retired secretary, finished Collins' thoughts when she said, "The food is reasonably priced for people on fixed incomes, and Mr. Eddie is a very nice man."

"This is where I had my first meal when I came to Washington a poor boy," said Bill Hasson, a D.C. government employe, as he shared dinner yesterday with his 8-year-old daughter, Shaza. "I just wanted her to see this historic site."

Protected by the fervent religious convictions of its Roman Catholic founder, Evan Sholl (who dished out Holy Scripture printed on cards with every meal), the restaurant seemed to be invincible. Even when anti-Ku Klux Klan protesters threw bricks through the windows in November 1982, Sholl's hardly missed a beat. The windows were taped up, the glass was swept away and breakfast was served as usual one day later.

Last June, Ed Sholl was notified by McPherson Square Associates, the new owners of the building in which the restaurant is located, that his lease was up and that he was being evicted. The building is scheduled to be gutted to make way for new shops and stores. A new Sholl's is scheduled to open in February at 1735 N. Lynn St., in Rosslyn.

Many of Scholl's 44 employes say they will try to get jobs at the new location, but many fear that transportation will be a problem. Others are looking for new jobs and preparing to sign up for unemployment benefits.

"I feel just terrible," said waitress Anna Laubert, 60, as sentimental customers summoned her for kisses from behind the serving counter where she has worked for 20 years. "It's like a hurt you get when you lose something you love," she said, as she wiped her eyes.

As the 8 p.m. closing hour drew near, Sholl's was serving a final dinner to more than 100 patrons, a virtual full house. Many were jovial, and chatter of days gone by filled the air.

"Everybody is having a good time," Ed Sholl said. "That's the only way to go."