A District restaurateur and an associate allegedly bought more than five kilograms of cocaine, distilled it into crack and distributed it to dozens of users throughout 1988, according to an indictment unsealed in federal court in Alexandria.

Nasser Zolfaghari, owner of the Dome Restaurant in the 2100 block of M Street NW, and Mohammed Saberi were charged with one count of conspiring to buy and distribute cocaine and crack. If convicted, they face a minimum sentence of 10 years without parole.

Federal prosecutors, arguing that the defendants used their homes and businesses to facilitate the drug network, also seek to seize the Dome, Zolfaghari's $800,000 house on Heatherhill Court in Bethesda and a condominium apartment on St. Andrews Place in College Park.

U.S. Magistrate W. Harris Grimsley, after hearing testimony yesterday that Zolfaghari allegedly bought opium and heroin during the 1980s, called the defendant a "danger to the community" and ordered him held without bail.

The 30-page indictment unsealed Monday identifies Zolfaghari and Saberi's cocaine source as Roberto Esteban Fuentes, a Bethesda resident who was sentenced last year to 22 years in prison for running a criminal enterprise and 37 other charges.

A codefendant in Fuentes' trial said after the case that he gave drugs to Mayor Marion Barry through the mayor's aides, an allegation that Barry has denied. Gettings said yesterday that his client has no connection to Barry.

Assistant U.S. Attorney Jay Apperson said evidence shows that Zolfaghari and Saberi ran continuing crack parties at Saberi's apartment on Massachusetts Avenue NW.

"Zolfaghari paid for the cocaine, which Saberi cooked into crack before they distributed it free to numerous entertainers, doctors and business associates," Apperson said, declining to name the alleged users. He said Zolfaghari paid the rent on the apartment.

Brian P. Gettings, Zolfaghari's attorney, said the indictment does not charge the defendants with reselling the drugs, adding that evidence suggests little more than that two men developed drug habits.

"You will hear us argue that this is a possession case that should be tried in the District of Columbia," Gettings said. He said he preferred a District court because recent, highly publicized cases suggest District juries are more forgiving of drug possession offenses.

Zolfaghari also owns the Italian Gardens restaurant in College Park, according to evidence presented in yesterday's detention hearing.

The indictment alleges that Fuentes supplied Zolfaghari and Saberi with one or two ounces of cocaine each week throughout 1988. An intermediary, Samad Arshadi, collected the money from Zolfaghari then bought the drugs from Fuentes at his Bethesda apartment, a gas station on Wisconsin Avenue in Bethesda or a Hot Shoppes restaurant on Wisconsin, according to the indictment.

Arshadi, also identified as a drug dealer in the Fuentes case, was named as a potential witness in the drug trial of Marion Barry.

William B. Moffitt, Saberi's attorney, said yesterday that his client may be the victim of double jeopardy. Moffitt said Saberi had been charged in the District with cocaine and opium possession and agreed to plead guilty after prosecutors dropped the cocaine count.

"Then all of a sudden it shows up on his side of river," Moffitt said of the current indictment. "I guess they didn't like the {14-month} sentence" Saberi served on the previous conviction.

Trial in the case has been set for Nov. 28.