THURMONT, MD. -- In Thurmont, the legend goes, Sir Winston Churchill was once seen in a local tavern, wearing a bathrobe and working a slot machine.

That, of course, is not true. Older residents of this town, five minutes from the presidential retreat of Camp David, are familiar with the facts: Churchill was fully dressed and drinking a 7-Up. He strolled over to the jukebox, dropped in a coin and played "The Beer Barrel Polka."

There are other tales from Thurmont of famous figures in unguarded moments -- Mamie Eisenhower at the notions shop with her mother, Jackie Kennedy leafing through movie magazines at the confectionary.

But for the most part, the 2,000 residents of this town and the dignitaries ensconced at Camp David have rarely mingled. In fact, there appears to be an unofficial town policy: Respect the president's privacy. Act nonchalant about momentous events nearby. And, should the nosy inquire, pretend not to know the location of the world-famous compound.

"You really get the runaround about that," said Deborah Burke, a former Montgomery County resident who opened The Wilderness Shop in Thurmont a year ago. "Most of the people know where it is, but they won't say where. They'll just say, 'Oh, it's about five minutes away from here. You know, over thataway.' "

When Soviet President Mikhail Gorbachev meets with President Bush at Camp David today, the leaders will be within shouting distance of the Catoctin Mountain campers who are applying tick spray and grilling hot dogs -- and their meeting will conflict with a major annual event in Thurmont, the strawberry festival. As usual, the Cozy Inn is booked solid with journalists who are again referring to Thurmont as "a sleepy little town" and its residents as "the folks," but no one at the inn expects to get a glimpse of the presidents.

"Oh, we won't see them. They'll stay up at David," said Mary Freeze, whose late husband, Wilbur, opened the Cozy Inn and Restaurant in 1929. Known for its cheap and bountiful buffet and favored by busloads of retirees, the business has had several brushes with international fame. A display case in the restaurant features mementos of past Soviet summits: a shot glass, an empty caviar jar, a few rubles and a square plastic button from a Cozy Inn telephone used by a Soviet delegation to call Camp David.

Thurmont has been privy to such events since 1942, when President Franklin D. Roosevelt chose the site in Catoctin Mountain National Park as his "Shangri-La," as he nicknamed the cool, wooded retreat. Located an hour's drive from Washington -- and in later years, a 20-minute helicopter ride -- the camp has received 30 heads of state and witnessed several epochal events.

Winston Churchill was in Thurmont to discuss the Allied invasion of Europe in secret meetings with Roosevelt. In 1959, after President Eisenhower had named the retreat for his grandson, Soviet Chairman Nikita Khrushchev was invited in an effort to mend the relationship between the two nations. From those talks, the phrase "Spirit of Camp David" was coined to describe what was thought to be a friendlier attitude toward world problems. Initially, however, Khrushchev was offended that he had been invited to stay at what he feared was some makeshift camp in the woods.

The Kennedys did not frequent Camp David, but President Johnson liked "to get away from the noise and carbon monoxide of downtown Washington" for "a clearer view of national horizons." It was also a favorite spot for President Nixon, who hosted foreign heads of state at the compound on 11 occasions, including Soviet leader Leonid Brezhnev in 1973.

"The Camp David Summit," as it became known, took place in 1978 when President Carter hosted Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin to launch peace negotiations in the Middle East. During that marathon meeting, Thurmont was immersed in summit activities in a way the town had never been before. The American Legion Hall was transformed into a bustling media center, and David Brinkley and Barbara Walters dined at the Cozy Inn.

Throughout the Reagan era, many of the president's weekly radio broadcasts originated from Camp David, and the Bushes, too, have made frequent use of the facilities, spending the Christmas holidays there last year. Thurmont residents remark, however, that they never know who is coming or going at Camp David.

"We hear the helicopters or we hear it on the news," said Robert Glass, who operates the Looking Glass Flea Market. "Every once in a while, some marine will walk in here and look around."

One thing is certain: Thurmont has never really capitalized on its unique position. There are no Camp David ashtrays for sale in town, no "Welcome, Gorby" billboards.

In fact, as usual, many residents were pretending last week that nothing more exciting than the strawberry festival was about to unfold -- as banners all over town indicated.

"The summit? Oh, we don't do anything about that," said librarian Margaret Bruchey, who has commanded the storefront public library for 27 years and has been interviewed countless times by reporters filling time between summit briefings.

"About the only time I cash in on it is when I'm out of town and I end up telling people I live near Camp David," she said. "Otherwise, nobody knows where Thurmont is."