Some Washington drug dealers allegedly received protection against arrest and got advance notice about drug raids from members of the 4th Police District, who also helped the dealers by arresting their rivals, according to sources familiar with the investigation of the 4th District vice unit.

When the rival dealers figured out that they apparently were being set up, they in turn provided 4th District officers with information about the other dealers, sparking battles among drug dealers in upper Northeast and Northwest, according to the sources.

Federal authorities are investigating the allegations in connection with a grand jury probe of the 4th District vice squad, the sources said, and they also are trying to determine whether police officers who assisted the dealers received cash payoffs from them in exchange for the protection.

In addition, authorities are investigating the squad's use of police funds, intended for drug purchases and payment of informants, to determine whether officers pocketed any of the money.

Sources said that in some instances the tips from drug dealers were used as the sole basis for search and arrest warrants -- although officers filed affidavits saying they had probable cause based on undercover drug purchases. The purchases were never made, but to create documents in support of the fraudulent affidavits the officers allegedly applied for and received police funds to cover the nonexistent purchases, sources said.

The amount of police funds involved has not been determined, but vice squads in the city spend as much as $40,000 each per year for undercover drug operations.

Capt. William White III, a D.C. police spokesman, said the department would not comment on the allegations because of the continuing federal probe.

FBI agents are examining the files of all drug cases brought by 4th District vice officers since January 1986 in an attempt to locate the informants who allegedly participated in each, according to sources. They said the police department's Internal Affairs Division is assisting the FBI in the search for the informants.

The files were taken by FBI agents from 4th District headquarters, 6001 Georgia Ave. NW, during a search Sept. 9 that came at the end of an undercover FBI investigation into allegations that some 4D narcotics officers were personally profiting from their enforcement of drug laws.

The probe, which initially focused on allegations that four or five officers were skimming drugs and money seized during drug raids, was later broadened to include an examination of hundreds of search warrants obtained by 4th District officers.

Authorities have been told that some 4th District vice officers allegedly lied under oath to judges to obtain search and arrest warrants, claiming in affidavits that they or informants had made undercover drug purchases when the purchases had not been made or were not made at the time the officers swore they had taken place.

Because of the alleged improprieties, U.S. Attorney Joseph E. diGenova, with the concurrence of D.C. Police Chief Maurice T. Turner Jr., announced that more than 300 drug cases investigated by 4th District vice officers would be dropped.

The FBI also is investigating allegations that some drug dealers were tipped off by 4th District officers about Operation Caribbean Cruise, a drug operation in February 1986 that was expected to yield hundreds of arrests, numerous weapons and massive amounts of drugs, but resulted in only 27 arrests and seizure of $20,000 worth of drugs and 13 weapons.

Sources said the department's Internal Affairs Division, which earlier had investigated the allegations without pinpointing the sources of the alleged leaks, is now conducting a new probe. When completed, the report is expected to be the basis of further investigation by federal authorities.

Operation Caribbean Cruise was designed to break an alleged Jamaican-run drug ring that was believed to be distributing marijuana in the northernmost areas of the District.

In the past year, according to police sources, a large number of Jamaican drug dealers have moved into the city, including the 4th District, and have been identified as major sources of cocaine and crack.

Sources said some of the dealers who allegedly received protection are Jamaican and appear to be connected through a loose-knit organization. The sources said some of the Jamaican dealers were the initial people to provide information about rival dealers to 4th District officers.

While it is not uncommon for drug dealers to feed police information about other dealers, sources said this was believed to be the first time in the District that officers allegedly had used the information to obtain fraudulent warrants.

The sources painted this as a likely scenario:

A Jamaican would call up a rival dealer, saying he was out of drugs and needed to purchase some. When the rival dealer agreed to sell the drugs, the two would set a time and place for the transaction. The first dealer would then call police and give them the information, and police would prepare an affidavit based on the telephone tip. In some cases, the information was used to obtain arrest warrants and, in others, search warrants were also obtained using the information.

Police would then execute the warrants at the time and place agreed upon by the two dealers.

Although in many cases the information on which the warrant was obtained was factual, a legal expert said it probably would not have been legally considered reliable information from a credible, unbiased source -- the standard necessary for obtaining a warrant.

However, because the warrants ultimately led to drug seizures and arrests, sources said, some 4th District vice officers apparently relied increasingly on the procedure.

When the rival drug dealers realized how some Jamaican drug dealers had been able to solidify their businesses and reduce competition in the highly lucrative drug market in areas such as the Georgia Avenue corridor, they tried the tactic themselves, sources said.

Authorities are trying to determine if the 4th District officers were wittingly or unwittingly manipulated by the drug dealers in the dealers' attempts to control the drug market, sources said. Regardless of their intention, sources said, the officers' alleged involvement with the drug dealers fueled growing violence among the dealers.

Sources said the federal grand jury is looking into allegations that police funds intended for undercover drug buys and payments for informants were pocketed by some members of the 4th District vice squad.

D.C. police familiar with the use of such funds said procedures require an officer to apply for the money and return paper work to show how the money was spent. Normally, an officer obtains a lump sum for the purchase and the informant payment, but the documents returned to the vice squad must show what portion of the money was spent on drugs and how much went to the informant.

The informant must sign a receipt for his payment and the officer must provide detailed information about the informant. If the money is not used, it is supposed to be returned immediately to the vice squad's fund. Sources said that the 4th District documents were in disarray, but that investigators have found documents showing payments to informants in cases where no informant was used.

For example, a source alleged, a log shows that police repeatedly referred to an informant who had only a nickname and no address or date or birth.