Charles Davis, one of the brightest spots in the Washington Bullets' training camp, is making a stronger bid than expected for Greg Ballard's starting small forward spot, Coach Gene Shue said yesterday.

Ballard, team captain and leading scorer last season with an 18.8 average, said he welcomes the competition.

The Bullets will play their second exhibition tonight at Madison Square Garden against the Milwaukee Bucks in the first game of a doubleheader. The New York Knicks and New Jersey Nets will play in the second game.

The Bullets were so impressed before last season with Davis that they moved Ballard to power forward and started both of them in eight of the first nine games. Then Ballard was moved back to small forward and Spencer Haywood started at power forward.

"I was hesitant last year," said Davis, a 6-foot-7 second-year man from Vanderbilt. "I was always looking to pass the ball instead of taking my shot when it was there and as a result I didn't have that much confidence in my shot."

Davis came to camp brimming with confidence this season, however. He lifted weights three days a week and worked on his shot on the alternate days last the summer and has been impressive in camp from the first day.

"I look at him a lot differently, now," Shue said. "He still has a way to go in some areas, but he will be a factor. Can he beat out Greg? That's up to him."

Based on his performance in the Bullets' first exhibition game Monday in Atlanta, Davis is, indeed, crowding Ballard for more playing time. Davis led the Bullets with 16 points, making eight of 13 shots from the field, and had eight rebounds and four assists in a 100-95 loss to the Hawks. He averaged only 3.8 points a game last season.

Davis and Ballard have dissimilar styles. Ballard basically is a jump shooter, who plays more like a power forward than a conventional small forward. Davis is a runner who likes to drive to the basket and handle the ball.

"Charles has really done a good job, so far," said Shue. "He has to show continued improvement, though. He has to get back on defense more and quicker. If we can get him to do that, then we'll even think about playing him at guard some."

One of Davis' biggest supporters is Haywood, who worked out with him in the offseason.

"Charlie really worked hard on his game," said Haywood, "and it shows. I taught him everything I know."

Haywood has a calcium deposit in his right calf and didn't practice yesterday. He won't make the trip to New York. Carlos Terry is expected to start in his place . . . Both teams denied it, but sources say the Bucks have talked to the Bullets about acquiring guard John Lucas. The Bucks traded their regular point guard, Quinn Buckner, to the Boston Celtics for Dave Cowens and are left with rookie Paul Pressey and 5-8 Charlie Criss as point men, not a comfortable feeling for Coach Don Nelson.