MANCHESTER, N.H., FEB. 16 -- Massachusetts Gov. Michael S. Dukakis won a record-breaking 16-point victory in the New Hampshire Democratic primary tonight, virtually matching the combined vote of his two closest rivals and shattering the jinx that has plagued other favorites in this leadoff primary state.

In the bitterly contested battle for second place, the Iowa caucus winner, Rep. Richard A. Gephardt (Mo.), edged out financially strapped Sen. Paul Simon (Ill.) by about the same 3-point margin he had in Iowa. Gephardt said the outcome would assure him of the financial support he needs to compete in the March 8 "Super Tuesday" voting concentrated in the South.

Simon indicated he would like to try his luck again in next Tuesday's Minnesota caucuses but conceded that his second close loss to Gephardt "will make a huge difference" in his ability to raise money and reduce a debt that has passed $500,000. Simon's wife, Jeanne, said, "Third place is not the greatest, but I think we can hang on until Minnesota."

As in Iowa, Jesse L. Jackson demonstrated his ability to attract significant numbers of votes in a virtually all-white constituency, and was running a hair ahead of the other southern-based candidate, Sen. Albert Gore Jr. (Tenn.)

The two western contenders, former Arizona governor Bruce Babbitt and former Colorado senator Gary Hart, were at the back of the pack. Babbitt was expected to bow out later this week but Hart vowed to carry on his lonely quest for political rehabilitation. When asked about his "let the people decide" slogan, Hart said, "I didn't mean the people of two states. I want the people of all 50 states to decide."

With 100 percent of the precincts reporting, Dukakis had 36 percent, Gephardt 20 percent, Simon 17 percent, Jackson 8 percent, Gore 7 percent, Babbitt 5 percent and Hart 4 percent.

Dukakis' double-digit margin of victory in this neighboring state made him the man to beat, at least for now, in the unfolding Democratic contest. But even his advisers conceded that it is far from clear who will be in the lead when 1,307 delegates are chosen in the unprecedented March 8 voting across South and in states from Rhode Island to Washington.

Of the four top finalists, only Jackson has a track record that allows a provisional measure of his appeal in Dixie. He finished first or second in almost all the southern contests in 1984.

Dukakis' win here was no surprise, but his ability to defy the jinx that has plagued other Democratic favorites from Harry S Truman to Walter F. Mondale underlined the seriousness of his bid for the nomination.

Alone among the Democrats, Dukakis is well-organized and highly competitive in all four states voting between now and Super Tuesday -- Maine, Minnesota, South Dakota and Wyoming. His victory here more than erased whatever damage he suffered from his close third-place finish in Iowa.

His political director, Paul Jensen, said tonight that Dukakis has $2.5 million in the bank and expects another $500,000 in federal matching funds. Only Gore, who bypassed Iowa and made a modest effort here, can begin to match Dukakis' spending for Super Tuesday.

No Democrat since the late senator Estes Kefauver (Tenn.) beat President Truman in the first memorable New Hampshire primary in 1952 had been able to win by as much as 10 points in a contested year. Dukakis shattered that standard by winning among liberals, moderates and conservatives and in all age and income categories, according to ABC and NBC News exit polls.

The South, his aides acknowledge, will provide a far more severe test of the breadth of his political appeal, but he is losing no time in beginning the test, traveling to Atlanta and Tampa on Wednesday.

Gephardt gained his edge over Simon here, the network exit polls showed, by beating or matching him among the same groups Gephardt had attracted in Iowa: the blue-collar, middle- and lower-income voters and those with less education. Simon attracted more upscale, affluent and generally younger voters. The non-Dukakis liberals split between Simon and Jackson; Gephardt ran ahead of everyone but Dukakis among the moderates and conservatives.

In a state with less than 2 percent black population, Jackson found a core of support among younger and well-educated whites.

Only 22 delegates were at stake, to be allocated in the same proportions as the votes. But New Hampshire has always had an impact far greater than its size, because of its position on the calendar.

The primary contest here this year lost a bit of its stature because of the candidates' focus on the preceding week's Iowa caucuses, but as usual New Hampshire was the site of several of the more dramatic plot turns in the path to the White House.

It was in this state last May 6 that Hart and his wife, Lee, decided to "go home" to Colorado and suspend campaigning because of the furor over The Miami Herald's discovery of his weekend with Miami model Donna Rice. And it was here last Dec. 15 that Hart announced his reentry to the race. Hart had been the far out-front early favorite in the state where he had ambushed Mondale in 1984, but when he left the contest under a cloud of scandal, Dukakis grabbed the lead and never relinquished it.

Dukakis' advantages were clear: For 14 years, since his first campaign for governor, he had been appearing regularly on Boston television news programs, which reach 80 percent of the homes in New Hampshire. And, as his national political director, Jensen, noted today, Dukakis "had been addressing and dealing with issues of great importance to New Hampshire for years outside the environment of a presidential campaign." Notable among those was the controversy over the Seabrook, N.H., nuclear power plant, on the Massachusetts border, in which Dukakis earned the gratitude of environmental activists by refusing to approve an evacuation plan and, in effect, blocking the plant from going "on line."

But New Hampshire Democrats have a history of turning against neighbor-state favorite sons in the last week before the primary, as Sen. Edward M. Kennedy (Mass.) and Sen. Edmund S. Muskie (Maine) learned in 1980 and 1972, respectively.

Dukakis' core support in private and public polls rarely reached much beyond one-third of the likely electorate, and when he finished third in Iowa behind Gephardt and Simon, there was at least a theoretical possibility that the opposition might consolidate behind a single challenger -- as happened in 1984 when Hart gathered the anti-Mondale vote after beating all Democrats except Mondale in Iowa.

But it never happened. Charlie Baker, Dukakis' state campaign manager, said, "We had decided from the beginning not to take anything for granted in New Hampshire." Dukakis campaigned here 40 days, often coming up for evening events after he had worked a full day in the governor's office in Boston.

And developments in the final days broke to his advantage. His Iowa showing -- 22 percent to Gephardt's 31 and Simon's 27 -- was no embarrassment. And Gephardt stung Simon without finishing him off in Iowa, leaving New Hampshire voters to guess which was the real alternative to Dukakis.

Gephardt had worked New Hampshire hard and early, but the message he delivered on his many 1987 visits, emphasizing a view that "America is in decline," drew more stares of bafflement than nods of agreement from voters in this prospering state. Gephardt did get a boost from his Iowa win, jumping 9 points in Washington Post-ABC News tracking polls. But when Simon decided last Thursday to go after Gephardt's voting record "inconsistencies" -- in hard-hitting ads asking "Who do you trust?" -- the Missouri congressman felt the blow.

"We knew we would get added scrutiny after our Iowa win," said William Carrick, Gephardt's national campaign manager, "but this has been brutal." Simon's attack was reinforced by television and newspaper stories taking a skeptical view of Gephardt's new antiestablishment tone, leading Carrick to complain, "We're not getting a break from anyone."

By Friday night, Gephardt was angry enough that he denounced Simon in an emotional news conference following the leading candidates' joint appearance at a Democratic Party dinner in Concord, saying Simon should "take those ads off TV or take off his bow tie and admit he's just another politician."

But Simon did not relent and on Saturday his press secretary, Terry Michael, boasted, "We've stopped whatever momentum Gephardt had coming out of Iowa."

The only televised Democratic debate of the week took place late Saturday afternoon, and featured more Gephardt-bashing by Simon, Gore and Babbitt, enabling front-runner Dukakis to sail serenely above the fray.

It was not clear how much benefit Simon was deriving from his role as Gephardt's nemesis. He was a relatively late arrival in New Hampshire, waiting until well into the autumn to make an intensive tour of the state and beef up a skeletal organization. But Simon inherited some key supporters when Sen. Joseph R. Biden Jr. (D-Del.) ended his campaign and he showed a broad enough appeal to both liberal and conservative voters that Dukakis' strategist Jensen tabbed Simon as the rival "with real prospects" in the state.

But Simon's surge here, as in Iowa, was interrupted by Hart's return to the race in December, and by the time the fascination with the 1984 primary winner had run its course, Simon was so deeply enmeshed in Iowa campaigning that he had little time or money to invest here.

The other fortunate consequence of Hart's return, from Dukakis' viewpoint, was that it diverted Gore from his original plan to concentrate on New Hampshire in January while his rivals were tied down in Iowa -- a state he had officially forsworn.

Gore said in an interview in early January that he had hoped to establish his national credentials in the eyes of southern Super Tuesday voters by "making a showing" in New Hampshire, which has a large corps of moderate-conservative Democrats. But he said he believed that Hart had a "hard-core" 15 percent base here, and with other big chunks ticketed for Dukakis and whoever won the Iowa caucuses, Gore believed there was likely to be little room on the playing field here for him.

Jensen said today that Gore had "missed a big opportunity" by curtailing his campaigning here, and many New Hampshire Democrats agreed.

Jackson's goal here, as in Iowa, was modest: to show some vote-getting ability among whites and to improve on his 1984 showing. He spent little time here, but drew praise for his performance in the Saturday debate and had some of the most enthusiastic crowds of any candidate in the final two days.

Babbitt won many friends with his personal campaigning last year and established an organization that managed to be both efficient and good-natured. But he came in crippled from Iowa and his plea that New Hampshire voters "send a message" to the other candidates by endorsing his budget-reduction proposals, by far the most specific any candidate had advanced, was heard by meager audiences in the final days.

------------------THE DEMOCRATIC VOTE-----------------------------

----------ABC NEWS EXIT POLL RESULTS FROM NEW HAMPSHIRE-----------

------------------------------------------------------------------

.............Bab.....Duk.......Gep......Gore...Hart...Jack...Simon

-------------bitt----akis------hardt-------------------son--------

AGE

------------------------------------------------------------------

18-29..........8%....29%........12%.......9%.....4%.....12%....24%

30-39...........7.....34.........12........7......4......13.....21

40-49...........5.....29.........17........6......5......17.....20

50-59...........2.....34.........26........6......5.......6.....18

60+ ............3.....40.........25........6......2.......4.....16

------------------------------------------------------------------

POLITICAL IDEOLOGY

------------------------------------------------------------------

Liberal.........6.....35..........8........4......3.......18....24

Moderate........8.....31.........21........8......4........7....20

Conservative....3.....32.........26.......13......6........4....13

------------------------------------------------------------------

GENDER

------------------------------------------------------------------

Male............6.....30.........17........7......6.......11....23

Female..........6.....35.........16........6......3.......13....19

------------------------------------------------------------------

EDUCATION

------------------------------------------------------------------

High school.....3......42........25........7.......6........4...13

or less..........................................................

Some college....4......33........19........7.......6.......10...17

College grad....7......29........12........7.......3.......16...25

------------------------------------------------------------------

HOUSEHOLD INCOME

------------------------------------------------------------------

Less than.......4......34........19........6.......4.......16...15

$20,000..........................................................

$20,000 to......7......34........15........7.......5.......15...16

$39,999..........................................................

$40,000+ .......6......31........16........6.......3........8...29

------------------------------------------------------------------

UNION AFFILIATION

------------------------------------------------------------------

Union...........5......31........23........5.......7.......13...13

Nonunion........5......33........16........7.......4.......12...21

------------------------------------------------------------------

PARTY IDENTIFICATION

------------------------------------------------------------------

Democrat........7......37........15........6.......4.......12...19

Independent.....4......29........18........8.......5.......12...21

------------------------------------------------------------------

Figures are based on interviews with a random sample of 1,630 New Hampshire voters. Margin of sampling error for the overall results is plus or minus three percentage points. Sampling error is only one of many potential sources of error in this or any other public opinion poll. Percentages may not total to 100 percent.