As the coaches and players get off the National Basketball Association merry-go-around for a few days, pausing here at the site of Sunday's All-Star game, the talk of the league is the Washington Bullets.

Generally, the four division races are following form, with odds-on favorites Los Angeles, Milwaukee, San Antonio and Boston leading the way. No cocktail conversation there.

There is some speculation about how far Philadelphia can go without Darryl Dawkins, whose leg is in a cast, and Seattle's potential now that Gus Williams and Lonnie Shelton are back. But, without a doubt, the most popular question is: How are the Bullets winning?

The simple, quick response is: with defense. A more detailed explanation begins on June 10, 1980, draft day.

At that time, General Manager Bob Ferry was faced with a problem. The Bullets had qualified for the playoffs for the 12th straight season and had Wes Unseld and Elvin Hayes returning. Still, he knew it was time to start rebuilding.

After selecting Wes Matthews (later traded for Don Collins) in the first round, Ferry started gambling. He went to the kitchen at the Capital Club in Capital Centre and called Scotty Stirling, general manager of the Golden State Warriors. Ferry knew the Warriors had four of the first 25 choices and couldn't afford to sign four players. He told Stirling that if Jeff Ruland was available on that 25th pick and the Warriors took him, the Bullets would make a deal for him.

"They were looking for a ball-handling guard and we had one available (free agent Larry Wright)," Ferry explained. "We were looking for size, hell we're always looking for size, and I didn't think Ruland would be available when our second pick came up."

The Warriors, who already had selected Joe Barry Carroll and rebounding forwards Ricky Brown and Larry Smith, didn't even wait until the drafting was completed before trading Ruland for the rights to Wright or an '81 second-round draft choice.

Now, after Ruland has averaged 14.2 points and 8.9 rebounds this season in just 25 minutes a game for the 22-20 Bullets, it looks like the biggest steal the team has made since it acquired Hayes from Houston for Jack Marin in 1972.

The second cornerstone of Ferry's rebuilding project was laid when he used his second-round pick to select Rick Mahorn, an unpolished, Division II center with great physical assets, but questionable potential.

"He's raw and has a lot to learn, but he's got the body to be a good one," Ferry said at the time. After a year of watching Unseld from the bench, Mahorn has developed into the team's defensive catalyst and ranks fourth in the league in blocked shots while averaging 9.6 rebounds a game.

"Rick is the most important player in camp," Coach Gene Shue said during training camp. "How well we do this season depends a lot on how much he develops."

Shue's back court was in disarray throughout training camp. Kevin Grevey hadn't settled his new contract, first-round draft choice Frank Johnson was holding out, then Kevin Porter tore his Achilles' tendon. Brad Holland, a recent acquisition from Los Angeles, and holdover Andre McCarter were getting most of the playing time. Now both are gone.

The most important step toward stabilization was the signing of John Lucas on Oct. 19, just 11 days before the season's opener in Boston. Then came the biggest surprise of all. Between games of a preseason doubleheader at Capital Centre, Spencer Haywood, just off a plane from Italy, was signed to fill the void left by Hayes at power forward.

With Lucas and Haywood, a pair of free agents with troubled pasts, joining holdover Greg Ballard and Grevey, plus the untested Mahorn, it wasn't surprising that the Bullets won only four of their first 15 games.

What is surprising and the talk of the league is that since Dec. 2 they have a 19-9 record, third best in the league, and are solidlyentrenched in third place in the Atlantic Division, three games in front of fourth-place New York. All this dispite not having any player on the all-star team."

Since settling on his starting lineup, Shue has made only one change.That was forced on him when Lucas missed a Jan. 7 game in Philadephia without an excuse.

Lucas later acknowledged that a cocaine problem was the reason he missed the game and a few practices, but, since his revelation, he has played well and started three times after Johnson resprained his left ankle.

When the players are asked the reason for their success, they all talk of Shue's constant emphasis on defense and togetherness.

"No one is griping like they did last year," said Grevey, the team's senior spokesman. "We're working a lot harder in practice. Last year some of the older players wouldn't acept that. Elvin was bitter all the time when things didn't go his way. The older players were nonconformists. Now we have some guys who are just glad to be in the league and we're playing with intensity.

"I know it made a lot of people open their eyes when Gene brought in people like Haywood and Lucas," Grevey went on. "Spencer . . . I had heard nothing but bad things about him. But he's a lot of fun to play with. He's playing from his heart. I can't say one bad thing about him. Luke is the team jester, he's a very positive guy. He's our leader.

"We all get along," the seven-year veteran continued. "We work hard, we play hard and we're having fun. There aren't a bunch of cliques on this team, everyone likes everyone. And there isn't the greediness on the court that there used to be, where someone would be after someone else's job. I can honestly say that we're all pulling for each other."

The same cannot be said for the fans.

Despite their 18-9 record since Dec. 2, the Bullets are not attracting the crowds they had hoped for at Capital Centre.

After 22 games, they rank 19th among 23 teams with an average attendence of 8,074 a game. Only San Diego, Cleveland, Atlanta and Utah are lower. However, the Bullets still show an increase of 623 per game over the 7,451 figure of a year ago.

"Washington is a tough area," said Ferry. "There are so many games going on, both college and high school, competing for the fans' attention. Sure, we'd like to do better and we're doing everything we can. Now that football's over, maybe things will pick up."