Shows that literally spill out onto the street

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As its name implies, the Squat Theater is like a band of squatters, staking out new artistic territory where others have not yet thought to tread.

The troupe's major contribution has been the ''storefront theater.'' Their plays are produced in a street-level building in the Chelsea neighborhood of Manhattan with a stage midway between the audience and a large plate-glass window facing the sidewalk.

The backdrop for the action is thus a genuine cityscape, complete with passing vehicles and pedestrians. Just as important, passersby can watch the action along with the paying customers, viewing from the back instead of the front.

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Sometimes the ''real'' audience interacts with this ''phantom'' one, as bemused (or confused) strollers enter the theater to find out what's going on. And sometimes the show spills directly into the city, with staged events - an argument, a shootout, even a war scene - taking place beyond the walls of the theater on West 23rd Street itself.

It's a bold approach, lending urgency and humor to most Squat productions as well as a strong chance element. The idea is to generate tension between ''fiction'' and ''reality,'' while questioning the boundary lines between spectators, voyeurs, actors, and unwitting participants. It works.

Hunkered down in the strange terrain they have set out to explore, Squat isn't content merely to question traditional ideas of stagecraft - they challenge the very notions of theater, drama, and entertainment. They seek fresh definitions for these familiar concepts and fresh ways of conveying their cautionary vision of a civilization they see as beset by violence, vulgarity, and deadening materialism.

At worst, their quest leads to outbursts of ''shock the bourgeoisie'' sensationalism, childish tantrums of attention-seeking rage and obscenity. At best, it suggests new ways for theater to remain startling and relevant. Both sides of this frantically spinning coin are on view this season, as the Squat troupe mounts a retrospective of the three major works they have presented here since immigrating in 1977 from Hungary, where their views allegedly brought harassment from official censors.

Each of these works includes a number of different elements with loose and sometimes mystifying connections. None have plot or characters in the usual sense, and none quite muster the energy needed to sustain their eccentric development for the necessary 90 minutes or so.

Their first storefront show - ''Pig, Child, Fire!'' - begins with a reading from Dostoevsky and closes with the enigmatic image of two players dividing a sheet of glass. ''Andy Warhol's Last Love'' features a Warhol lookalike (seen ''live'' and on film) riding a horse, nearly being assassinated, and grasping a notorious terrorist in a grim embrace. Their most recent show, ''Mr. Dead & Mrs. Free,'' also includes long film sequences, which eventually give way to a bizarre cabaret act, a battlefield scene, and an inscrutable sculpture in the shape of a giant baby with TV sets for eyes.

The members of Squat are a collective who sign their works as a group. Between them, they have the multimedia skills to blend film, video, and live action into smooth though puzzling tapestries, at times using all three methods at once. Their work is sometimes funny, occasionally repellent, frequently puzzling, and usually unsettling - recommended for the adventurous only.

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