The pact between street gangs, whether formal or tacit, made it more difficult for small-time outsiders to infiltrate the market with crack, a drug that lends itself to independent sales because customers make more frequent purchases of smaller amounts than they do with other drugs. But the agreement did not keep it out for good. No one is certain who was the first to bring crack into Chicago, but now that it has arrived, distributors large and small are angling for their slice. 'More Active Market'

"What this did was create a more active market," said Ronald Allen, a professor of law at Northwestern University. "There is more money changing hands. Dealers want to get in on the market and want to get a bigger share of the market. But rather than cutting prices and putting out a better product, they kill each other."

The violence is taking its greatest toll on the South Side community of Englewood, a jumble of worn two-family apartment buildings and burned out apartment buildings, where 71 people have been killed so far this year, higher than the annual murder toll in many American cities.

There, 40 percent of all homicides are tied to drugs or gangs and the percentage of drug arrests at which crack is confiscated has gone from zero to 70 percent in two years, said Comdr. Ron Watson of the city's Seventh District.

The city deployed 100 additional police officers to Englewood over the summer, and it seems even now that every other car on Halsted or Racine Avenues is a police cruiser. The police have made 3,000 arrests since early August and confiscated 379 guns. Still, residents say they are afraid to go out after dusk or dawdle on street corners.

"No way, shape or form do I go out at night," said Andrew Allen, a retired postal worker and longtime resident. "It's the worst I've ever seen it. Just going out at night to get something, I can't tell you when I last did that. If I ain't got it by nightfall, I don't get it."

Residents who had only read about crack or watched movies about it are now living the nightmare themselves. They are adjusting to sight of discarded crack vials and ominous gatherings of drug buyers and sellers on street corners.