Drug arrests in the Washington area plummeted during the first nine months of this year, in part because of a decline in the region's open-air drug markets.

The drop in arrests, after years of dramatic increases, ranges from 33 percent in Montgomery County and 26 percent in Prince George's to 15 percent in the District.

But police say the smaller number of arrests does not necessarily mean less drug dealing or drug use, and they say crack cocaine remains a serious problem in the area.

The marked reduction in the number of thriving open-air drug markets, where aggressive dealers dash toward motorists to exchange crack for money, has meant in many cases that drug dealing has shifted inside. That has made it more difficult to detect illegal sales and make arrests, police say.

"You used to be able to drive down the street in some areas . . . and nine or 10 guys would come up and try to sell you dope," said Lt. Ron Sullins, head of the Prince William County/Manassas Narcotics Strike Force. "Now there are only a few guys out and they'll come check out the car and ask you questions and accuse you of being a cop."

In the District, police report that about half of 90 open-air drug markets that flourished in the last two years are less active or have gone out of business. Prince George's has seen the number of markets drop from 25 to nine; in Alexandria the number decreased from five to three.

Fairfax County's eight open-air markets remain, but with less drug dealing, according to police. Drug sales in Arlington's Nauck neighborhood, once the site of the county's dominant open-air market, have virtually ceased. Prince William County's open-air sales have dropped by about 50 percent. In Montgomery County, police say drug activity at nine open-air markets has dwindled to sporadic sales.

The diminishing sales in open-air markets, law enforcement officials say, are the result of stepped-up police efforts, higher cocaine prices, increasing difficulty in getting the drug because of large-scale seizures, and neighborhood activism, in which outraged residents have turned to nightly patrols to chase away the dealers.

During recent tours of 15 areas in the District, Alexandria and Montgomery identified by police as former open-air markets, no obvious drug activity was visible. At Hume Springs in Alexandria, on D'Arcy Road in Prince George's, and at Mayfair Mansions in the 3800 block of Jay Street NE and at Anacostia Road and B streets SE in the District, the drug dealing has withered.

A few years ago, "it was frustrating," Carlton Perry, a District narcotics officer, said of a former market at the 1400 block of Park Road NW. "You'd clear the block and the next minute the street is full. It was thick {with people}, sometimes 100 people, cars parked on both sides of the street, a lot of suburban traffic. Now look at it." Only three people, who appeared to be passersby, were present last Thursday night.

No drug activity was apparent last week in Rockville's Lincoln Park neighborhood, where crowds of 400 dealers and purchasers once clogged streets and female addicts traded sex for drugs in a cemetery, said Sgt. Raymond Simmons, of the Montgomery County Police Department.

Drug activity was curtailed last spring after police opened a station in the neighborhood at the request of residents. "Now it's a ghost town," Simmons said.

Police say they are cautiously optmistic. "Maybe {our efforts} are beginning to take their toll. People are beginning to ask if {cocaine} is worth it," said Capt. Collin Younger, head of the District's narcotics squad.

The downturn in arrests has been mirrored in other major U.S. trafficking centers. Police in Los Angeles reported an 18 percent decrease in drug arrests during the first nine months of this year compared with last year; police in New York, 12 percent. The U.S. Drug Enforcement Administration reports a 12 percent decline nationwide when comparing October 1988 through June 1989 with October 1989 through June 1990.

Police say the Washington area's appetite for crack cocaine may give way to drugs such as heroin; PCP, a hallucinogen known for its ability to make people feel superhuman; marijuana; and methamphetamine, sometimes called speed. In recent months, undercover D.C. police have reported an increase in heroin use.

"The drug market is changing," said Lt. John Karinshak, of the Arlington County Police Department. "But we don't know . . . what will happen next."

Since May, DEA officials have on five occasions seized 300- to 500-gram portions of heroin in the Washington area, and four shipments ranging from 600 grams to a kilogram bound for Washington from the West Coast were confiscated. The seizures double those of a year ago.

When crack cocaine became the preferred drug several years ago, the open-air market became a blight fixed in the minds of the region's citizens and police. Dealers transformed neighborhoods into their workplaces; residents became afraid and police were forced to look for ways to cope with the blatant high-volume sales.

As a result, the District implemented "Clean Sweep," which involved teams of police swooping into open-air markets to make mass arrests. Similar "jump-out" operations were set up throughout the Northern Virginia and Maryland suburbs, and joint investigations between local and federal law enforcement officials increased.

In addition, some police began reverse sting operations, in which police pose as dealers and sell to customers, who are then arrested; patrol officers were instructed to watch for signs of street-level drug dealing. According to Bob Murray, commander of the criminal investigations bureau in Fairfax County, it became crucial "to take out the people in the public view."

During a recent raid in Prince William's Williamstown town house community, undercover officers used several high-profile tactics, including blockading the entrance, photographing and questioning passersby, and battering down the door of a suspected crack house.

In a recent interview, a Washington area man arrested for cocaine distribution said jump-out squads and reverse stings have frightened away recreational users, although addicted customers, who buy as much as $1,500 worth of crack cocaine per week, keep returning.

Occasional users once bought "enough crack for a party or the weekend, but that's changing because of the undercovers," said the man, who asked not to be identified because his charges are pending in court. The most successful street dealers from the Prince William area, who once made $15,000 to $18,000 a day, are now making about $10,000 or less, he said.

In their fight against crack cocaine use, police also began taking advantage of strengthened federal forfeiture and sentencing laws, such as a 10-year mandatory prison term for conspiracy to sell 50 or more grams of cocaine. Local law enforcement officials say they also have been aided by large-scale cocaine seizures by federal and international agencies.

Mexican authorities seized 33.7 metric tons of cocaine in 1989; in the first six months of this year, 23.6 metric tons were confiscated, DEA records show. In Colombia, 37 metric tons were taken in 1989, compared with 48 metric tons seized in the first nine months of this year. DEA domestic seizures totaled 43,294 kilos from October 1988 through June 1989, compared with 53,119 kilos during the same time this year.

A tightening supply of cocaine and an increase in prices have made it harder for street dealers to get drugs, police say.

The cost of cocaine has risen between $200 and $600 per ounce over last year's price. Regional DEA officials report that a kilo sold for about $20,000 from July to September 1989; during the same time period this year, it cost as much as $38,000.

"There is a distinct lessening of the availability of multi-kilogram amounts of cocaine on the streets of our major cities," said Stephen H. Greene, a senior DEA official. "We may have a trend. And trends must be watched carefully to see if this is a brief fluctuation in the supply or if there is a permanent scarcity."

Because less cocaine is probably available, police say, some dealers began substituting chunks of nuts and soap for crack. The quantities of cocaine sold also have been reduced.

Residents have set some boundaries too, mobilizing through civic patrols and prayer vigils and providing information to police.

Last year, a group of Northwest Washington residents, concerned about a suspected drug-related shooting in an apartment complex and an increase in street dealers around Swann, S and T streets NW, formed the SS&T community patrol. During the first walk, "we were all terrified," said Charlie Gaynor, 44, a member of the group. "We're not heroes. But these were our homes."

The 2400 block of Shirlington Road in Arlington also used to be home to a flourishing narcotics trade until residents of the Nauck neighborhood began patrolling on July 21. "We made ourselves visible, used video cameras and took still pictures" of customers, said the Rev. Richard Green, of the Crack Down on Drugs effort.

"They aren't standing in the street intimidating us," said Maxine Clark, a resident of the Hume Springs neighborhood in Alexandria. "The children are able to play on the playground again."

The neighborhood activism and law enforcement have forced dealers to rely more heavily on crack houses, according to police. Dealers also are moving around to confuse police and establish new markets, police say.

As dealers have changed tactics, so have police. In Fairfax County, narcotics investigators are targeting the arrest of dealers of larger quantities of cocaine. Area agencies said they are placing more emphasis on getting search warrants for suspected crack houses.

Still, police said, they are not easing up, despite the decline in street drug activity and the decrease in the number of arrests. "Now would be the worst time for us to let up," said Lt. Tom Evans, head of Montgomery County's drug enforcement.