Despite an incredible 35-point performance by Roger Phegley, the Washington Bullets lost their second straight cliffhanger tonight when the young New York Knicks gunned them down in overtime at Madison Square Garden, 125-118.

Knick guard Michael Ray Richardson, who had only four points going into the overtime period, scored six and had two steals in the final 1:05 to preserve the first Knick victory this season and drop the Bullets to 0-2.

The Knicks' 7-1 rookie center, Bill Cartwright, was an impressive force as he led the Knicks with 27 points. Guard Ray Williams added 25 and forward Toby Knight 22.

The Knick balance overshadowed Phegley, who played only four minutes and missed both shots he took in Friday's loss to the Philadelphia 76ers. Tonight he played forward and at times was virtually unstoppable. He had 27 points in the second half.

The fact that the Bullets made a game of tonight's affair is something in itself. They have only three true forwards on their 11-man roster in Elvin Hayes, Bob Dandridge and Greg Ballard. Hayes fouled out. Dandridge has a sore ankle and didn't dress for the game and Ballard has a sore ankle and played only 14 minutes. That meant Phegley had to play forward.

Phegley made 11 of 23 from the field and 13 of 13 from the foul line. He came in to start the second quarter and played the remainder of the game.

The Bullets needed all his points to stay close.Hayes started slowly and scored only 17 points and Kevin Grevey shot zero for 10 from the field.

Worse, the Bullets committed a whopping 30 turnovers, 11 in the first quarter when they fell behind, 33-18.

But they kept plugging away, even though they were still down by five, 108-103, with 2:31 left in regulation.

Phegley made a short jumper for his seventh and eighth straight points to cut the Knick lead to three and a steal and a driving layup by Phil Chenier cut it to 108-107. With 1:16 remaining, Wes Unseld made two free throws to give the Bullets a 109-108 advantage. Ray Williams tied the score with one free throw and then Phegley hit two free throws to put the Bullets back on top, 111-109, with 32 seconds left in regulation

Knight scored on a drive with 23 seconds left to tie it again. The Bullets had plenty of time for one last shot, but the best one they could get in 23 seconds was a forced 20-footer by Dave Corzine at the buzzer.

He missed to send the game into overtime.

A fast break basket by Corzine put the Bullets ahead 118-116, with 1:50 left, but they did not score again.

Unseld picked up his sixth foul trying to contain Cartwright and the rookie from San Francisco made two free throws with 1:34 left to tie the score at 118-118.

On the next Bullet possession, Richardson stole the ball from Phegley as Phegley went up for a jump shot. That eventually resulted in two New York points as Richardson was fouled at the other end and made two free throws to put the Knicks ahead, 120-118.

In a scramble for a loose ball with 50 seconds left, Kevin Porter and Richardson tangled and official Paul Mihalik said it went out of bounds off Porter.

Porter was incensed, protested and was assessed a technical foul. Ray Williams made the shot to give New York a 121-118 lead and the Knicks retained possession.

Richardson scored again on a driving layup with eight seconds remaining, and then made two free throws with one second left after the Bullets had blown their last chance to score.

Phil Chenier, who didn't play Friday, played 35 minutes tonight and scored 13 points. He also had six rebounds, five assists and four steals and played perhaps his best allaround game in two seasons.

In addition to the turnovers, the Bullets were beaten soundly on the boards, 58-46. Starting Knick gards, Ray Williams and Richardson had 18 of them compared to only 19 for Unseld and Hayes, the Bullets' top two rebounders.