START with the fabric: the feel of soft wool in the hands. The touch stimulates a thought, then a doodle: a dress that looks like an orchid, a wedding gown fringed with fleece, slinky lingerie. The doodles come to life: models sashaying down a runway; the elegant sound of Puccini's Madama Butterfly; applause for the creativity.It's every design student's dream: a parade of one's own creations shown to some of the fashion industry's top designers. To top it off, the two best student designers are rewarded with a trip to Milan, Paris, and London to meet some of the top couturiers. It's a dream that comes true once a year in Melbourne at the Australian Wool Corporation's Young Designer Awards. This year the judges waded through 450 sketches before sending fabric to the designers of the top 95. Most of the students are enrolled in state Colleges of Technical and Further Education (TAFE). These schools are mainly vocational, sort of like a community college. Each state had its own finals with the winning concepts paraded before the industry and press late last month. The theme was "Australia wool: pure new sensation." This year the students were working with "cool wool," a lightweight textile made by Macquarie Textiles Group and provided by the Wool Corporation. One of the judges, Geoff Riddell of Riddell Fashions, says the winning criteria included the commercial potential of the design, how the student treated the fabric, the degree of difficulty of the design, and the source of the inspiration. "With a good designer, your fingers tell your mind how to do it," says Mr. Riddell. Some of the designs are pure imagination: a woman sprouting out of blue rose petals, a man outfitted in wool "chaps," a wedding gown trimmed with fleece instead of fur. Colors are largely pastel, reflecting a more conservative nature. But, some students dye fabric a vibrant yellow or green. The textures are slick, with the wool draping more like silk than arctic wear. Matilda Rossi of Murray Bridge, South Australia, pays homage to Merino sheep by integrating a cable pattern buried in a deep plait into a man's suit. The pattern is mirrored in an embroidery running down the sleeves. "The menswear shows the versatility of the fabric which has a more sporty look," says Ms. Rossi, one of the two national winners. Lynette Crosbie of Geelong, Victoria, is inspired by the concept of "the female emerging." She says her purple peasant jacket and leggings are supposed to represent the "cosmic female" who now can express herself with a soft image. The predominant color is a "powerful female purple." Her menswear designs have a feminine touch as well. "There has to be male liberation as well," says Ms. Crosbie, the Victoria state winner. Marc Carnevale of Melbourne also adds a softer touch to his menswear designs by adding peach. However, he mainly lets the material dictate the design. "The wool is the inspiration, you could pick it up and just see how it would drape," says Mr. Carnevale, the menswear winner for Victoria. The cloth also inspires Anna Thomas from Perth, Western Australia. Ms. Thomas's design, a full-length form-fitting white dress, is the national womenswear winner. Her message in the design, she says, is "femininity and sensuality." Her inspiration is the decadence of art nouveau. The judges were impressed with the degree of difficulty in Thomas's design. She cut the cloth on the bias, or at a 45 degree angle, to give the fabric maximum stretch. "I was told it was difficult but I learned so much," says Thomas. Not all the experiments worked so well. Crosbie sent some cloth out to be dyed only to have it returned unusable. "It was a horseblanket," she says. "Everything went wrong, it was a valuable lesson," she adds. The exposure from winning one of these awards opens up design doors. Last year, one of the judges suggested to John Cavill, a top designer, that he look at the work of Peter Mikic, the Victoria womenswear winner. Mr. Mikic got the job with Cavill in Melbourne. m just learning all the time," he says. And, Daisy Veitch of Adelaide, a national winner in 1987, recalls her trip to Paris where she worked for Kenzo. She arrived at his studio nine days before a big press showing and watched as the couturier toiled from 9 a.m. to 2 a.m. every night. She experienced private shows and press shows, watching Kenzo change the garments and the accessories. "I was just incredulous," she remembers. "It was like being on an information airplane - you were covering so much so quickly," says Ms. Veitch, who is now an apprentice to one of Australia's top pattern makers in Sydney. Sponsoring the competition is also beneficial to the wool industry since it indoctrinates future designers into the idea that wool is a valuable fabric for fashion. "After all, these are the same young people who will enter - and one day control the direction of - the Australian fashion industry," says Barry Jackson, managing director of the Australian Wool Corporation. Wool Corporation officials also hope to sow seeds in the audience, which includes some of the current designers. They especially hope to spark more interest in "cool wool," which is targeted towards spring and fall garments. The fabric itself is spun fairly tight with parallel threads to avoid prickling the skin. Fashion designers say it has a "crisp handle." The wool business needs all the help it can get. Wool prices are down 50 percent from three years ago. Wool exports are expected to total $1.96 billion (Australian $2.5 billion) this year compared to about $4.7 billion (Australian $6 billion) at the peak in 1988-89. Today, a stockpile of nearly 4 million bales of wool remains from last year's harvest. The collapse in wool prices has hurt Australia the most since the country supplies 90 percent of the wool used in apparel. However, the Australian Wool Corporation continues to sponsor the Young Designers Awards, considered a high priority because of the favorable attention accruing to the industry from the competition.