The Minnesota Twins and Kansas City Royals aren't reality. Even the Boston Red Sox and Toronto Blue Jays aren't reality. Not if your goal is to win the American League East.

Playing against the New York Yankees in the hostile canyon of Yankee Stadium before 47,221 pin stripe-addled fans: that's reality.

Tonight, the Baltimore Orioles had an abrupt and chilling encounter with that hard baseball reality, losing, 5-3, to the Yankees on Graig Nettles' tie-breaking two-run homer into the right field bleachers in the eighth inning off the Orioles' ace, Scott McGregor.

For the Orioles, who had won 20 of 25 games in a giddy one-sided waltz through a schedule full of rumpled Rangers and tiny Twins, this was an evening to get reacquainted with the harsh facts of September baseball.

The first Yankee hitter of the night, Willie Randolph, singled and the next, Ken Griffey, drove a two-run homer into the bleachers. What hospitality.

That tone of Yankee bad manners was continued throughout the evening by Ron Guidry, who adamantly refused to leave the mound, despite 11 Oriole base runners. Guidry, 18-8 and running near the head of the pack for the Cy Young Award, pitched his 10th complete game in 11 starts.

By evening's end, the second-place Yankees were four games behind the Orioles and looking forward with appetite to the next three games here. The teams play a twinight doubleheader Saturday (5:30, WDCA-TV-20), with the Orioles' Storm Davis and Mike Boddicker facing John Montefusco and Shane Rawley.

"It's good to beat them the same way they've been beating everybody," said Guidry after his seven-hitter.

Guidry's only bad moment of the night came in the eighth, when Gary Roenicke tied the game at 3-3 with a foul pole-hugging two-run homer. That one scare for the Yankees was balanced against a whole night of watching the visitors squirm.

Four times, the Orioles hit long drives to left which, in Baltimore, might have been home runs. In Death Valley, they weren't even particularly loud outs.

Once, when Roenicke slid into second base, shortstop Roy Smalley simply shoved a forearm into his chest and pushed him several feet off the base. The umpire, who hadn't seen the chicanery, called Roenicke out.

When the Orioles weren't watching opposite-field doubles--three of them--trickle down the chalk, they were watching Guidry strand their runners.

When the rest is forgotten, both teams will remember one pitch from McGregor to Nettles. With Don Baylor on first and nobody out, Nettles worked the count to 2-2. Like the heady pro he's always been, Nettles guessed McGregor would return to the high fast ball he'd used to strike out Nettles in the fourth.

It's one thing to guess right. It's another to hit a 400-foot game-winning line drive a dozen rows up into the stands. Nettles did both.

"It was two feet out of the strike zone," Nettles said with a grin, "and probably just where Scotty wanted to throw it. He thought he could sneak it by me."

Not much escapes Nettles' attention. The Orioles' pitchers call him "Scuba," because of the way he guesses at pitches, then dives all over the batter's box, adjusting his stance and stride in accordance with his intuitions.

"He's been around and he guesses. This time, checkmate," said McGregor (17-6).

"I was mad. I'd kept us in the game all night, then, just when we get some runs to tie it, they get 'em right back . . . Certainly, we wanted to come in here and put these guys away, but two wins (in the remaining three games of this series) will erase tonight . . .

"I was walkin' the wire for a while," said McGregor, who allowed 11 hits and escaped even more jams than Guidry, "but . . ." But Nettles knocked him off.

"That guy's just too short for his swing," said Mike Flanagan, referring to Nettles' head-high swing.

"Puff (Nettles) went up over his shoulders and got it. I didn't even watch it go out," said Ray Miller, the Orioles' pitching coach. "What a great baseball game that was. It's going to be like '80, when we had eight of the greatest games with these guys that you ever saw. This is just starting."

"I thought he'd lose at least one more game this season," deadpanned Ken Singleton. "If they can find a way to pitch him (Guidry) every day, we might be in trouble. But they can only pitch him every five days."

Nettles was subdued and analytical in assessing the Yankees' task.

He said, "We need to win three out of four here," which would cut Baltimore's lead to three games with three weeks to play.

"People talk about this being like 1978," added Nettles, referring to New York's successful chase of the Red Sox, "but then we were facing a team that was going downhill. The Orioles are hotter than we are. We're lucky we get to play them seven more times. It doesn't seem like they ever lose two or three in a row. Maybe we have to do it ourselves."

Aside from this game's trio of two-run homers, each team scored a tainted run. With two out in the second, the Orioles got a single from Rich Dauer, a walk from Todd Cruz and an RBI single to right from Rick Dempsey.

Dauer should have been out at the plate, but rookie catcher Juan Espino botched his block of the plate. Espino is playing because Yankee Manager Billy Martin is punishing Rick Cerone for swinging through a "take sign" in Milwaukee on a 3-0 pitch.

The Yanks got a cheap run in the fifth when Randolph walked and scored from first on Dave Winfield's ground-ball double over first base. A relay from Dan Ford to Dauer to Dempsey would have had Randolph at the plate, except Dempsey couldn't field the hard, quick hop off Dauer's throw.

Bad hops in Yankee Stadium. Long outs in Death Valley. Lou'siana Lightning on the mound and late-inning lightning at the plate. That's pennant race reality. That's the way it's supposed to be.