The Bullets are in the midst of a lingering dream that is beginning to take on a Hollywood glow.

For the past three months, they have floated gleefully through the first half of an NBA schedule that was suppsed to knock them off cloud nine, their heavenly residence since winning the league title in June.

Instead, their opponents have wound up having most of the nightmares.

"This is the closest I've come to having a coach's dream," gushed Dick Motta. "Look at this statistic sheet. I couldn't make the numbers prettier if I made them up myself."

That statistic sheet could have been produced by some well-meaning angel; it's filled with happy stories.

The Bullets reach the halfway point of the season tonight against San Diego in Capital Centre with the league's best record, its most-balanced scoring and its most-versatile depth. Even that good doctor in Philadelphia, Julius Erving, has been impressed by Washington's performance.

"I wouldn't have thought they'd have the best record at this point," he said, "but you never know what effect championships can have on a club. Just like Portland last year, the Bullets have started fast, they are winning home and away and they are winning the close ones.

"They certainly don't have the best talent in the league, but I'm impressed by the way Motta used his players. Their roles are well-defined and he gets a lot out of everyone through substituting.

"But remember also that Portland ran out of gas the last third of the season. Championships can drain you; your offseason is shorter and you can only go so long on emotion. I don't know if they can keep it up. Just like Portland, injuries could kill them."

The Bullets are fully aware that the respect they so carefully have built over the first 40 games could disapear as quickly in the second half with a losing streak or a substantial injury.

Nor is Motta predicting that his team will continue to play so successfully the rest of the schedule.

"This league is so balanced it is hard to be this good every night," Motta said. "But I think we have answered any questions whether we could be a good regular-season club, too, and not just save ourselves for the playoffs.

"They've done everything I have asked of them, and remember, no one thought we would do this well at this stage. There is no longer a question about our ability. People have to beat us now."

Washington arrives at this midway point in good physical shape. Most of the minor injuries that caused problems in December have healed and thanks to a schedule that had the team playing only four times since Dec. 28, the players are rested.

Motta has been careful not to demand too much from veterans merely to keep the record at a lofty level. Elvin Hayes, in the midst of another standout season, leads in minutes played (35 a game), but that average is played (35 a game), but that average is by far the lowest of his career. No one else is averaging more than 32.

"I don't think we have peaked," Hayes said. "We are just playing good basketball. No one is getting that high for games, but people are getting high for us."

The Bullets also realize they are not invincible.

When their outside shooting breaks down or the bench fails to supply sufficient reserve punch or a key player has a poor game, they are vulnerable.

And despite the best road record in the league, either edge over the rest of the teams is so slim they probably will have to play better the rest of the way to win the Atlantic Division and gain the home-court advantage in the playoffs.

Nipping at their heels like a bunch of playful puppies are Philadelphia their major division rival), Seattle, Los Angeles, Phoenix and the sprinting San Antonio Spurs.

"I think," Erving said, "we (the 76ers) are the cream of the crops. We will see after 82 games."

This has been a half-season of mild surprises. One morning, Kansas City and Atlanta were leading their divisions, and New Jersey was challengsions, in the Central. Both the Hawks and Nets have begun playing down to their level, however, leaving the Fords, oops, Kings alone as the one club that fooled nearly all the preseason prognosticators.

Everyone outside of Kansas City is waiting for the Kings to stumble. But as long as Phil Ford plays like a second Bob Cousy and as long as Denver, the most disappointing team, continues its intramural fights and ersonality clashes, Coach Cotton Fitzsimmons' Kings should remain on top the not-so-potent Midwest Division.

Denver has company in the "what's happening?" doghouse.

Milwaukee is finding out it can't win with a two-man offense and no center, even if Marues Johnson is gradually becoming an elite player.

Artis Gilmore's towering presence and lifetime contract haven't been enough to save inconsistent Chicago, and Indiana's wild trading and flings into the free-agent market haven't improved the Pacers' record, only their instability.

New York kicked out Willis Reed, who demanded a center, acquired Marvin Webster and still couldn't climb over.500 in the first half of the season. Red Holzman is a better X and O man than Reed -- for that matter, so is Lefty Driesell -- but line-up shuffling and a slower tempo have not eliminated the Knicks' defensive lapses and turnover problems.

Another of the old-guard teams, Boston, also took the Redhead route by replacing Satch Sanders with Dave Cowens. But Cowens has proved to be a better player than coach, mainly because Cornbread Maxwell and Chris Ford have played better than high-priced Billy Knight and Tiny Archibald.

Rick Barry leads Houston in assists; he was supposed to lead them into first place in the Central Division. But he'd rather pass than shoot, and no one wants to help Moses Malone, the league's next great center, rebound. Malone has kept the Rockets above.500 with his one-man show, but without John Lucas at guard, he may be in a rest home before April.

Nor is Malone enough to enable Houston to catch San Antonio, the league's hottest team and the Central Division leader. The Spurs had been playing so poorly that their normally free-and-easy coach, Doug Moe, was forced to establish his first mustobey rules.

More importantly, he benched guard Mide Gale for comeback star James Silas and center Mike Green for underrated Billy Paultz and, quicker than you can say "Iceman," the club erupted on the scoreboard and in the standings.

The rest of the division's coaches feature Detroit's Dick Vitale, who has discovered college spirit does not win pro games unless embraced by enough talented players, and Cleveland's Bill Fitch, who gave the boot to Walt Frazier and almost was booted out of Cleveland Coliseum over a lease hassle.

Philadelphia's decision to rid itself