SQUAT THEATER'S 'DREAMLAND BURNS'

By MEL GUSSOW

March 7, 1986, Friday, Late City Final Edition
SECTION: Section C; Page 21, Column 1; Weekend Desk

IN the nine years since it made its first American appearance, Squat Theater has refined its technique and become more discriminating in matters of taste. This is not to suggest that the nomadic, exiled Hungarian troupe has lost any of its radical fervor. Squat's new show, ''Dreamland Burns,'' written and directed by Stephan Balint, is a disquieting look at people who might be regarded as land-lost. Seemingly in touch with their environment, they are, in fact, adrift in their own fantastical nightmares.

Squat can still express shock for shock's sake, and there is a coldness to the storytelling that borders on the heartless. But ''Dreamland Burns'' (at the Kitchen) is filled with tricks of a high theatrical order and at least a measure of the promised magic.

The play begins as a movie. Eszter Balint, who starred in the film ''Stranger Than Paradise,'' plays a young New Yorker who has just taken her first apartment. The moment is both celebratory and sad. A moving day party, attended by parents and friends, declines into a depressive affair as Miss Balint is abandoned by her lover. She takes off, alone, on a night crawl of the city.

Stylistically, the movie shifts gears and becomes darker - from Susan Seidelman to Martin Scorsese - as the heroine is turned into a victim. Her oddest encounter is with a cabdriver-palmist. As his behavior becomes increasingly aberrant, she flees to her apartment.

After about 45 minutes, the movie has a tight grip on our attention. I could have settled back and watched another hour, but, exactly at that point, the film ends and the play begins. The stage, set for surrealism, is ablaze with a rectangle of fire. Fire remains Squat's most vivid and dangerous image. Miss Balint is still playing the leading role and, gradually, other characters from the movie make an appearance on stage - moving men, a wino and that cabdriver who quickly becomes an oppressive presence. Telling a bizarre story, he says, ''I don't know if it's true or not. It just happened.''

The setting, a representation of Miss Balint's apartment, is furnished with a number of sculptural figures that are as lifelike as those works by Duane Hanson that arrest us in museums - with one difference: they have no features on their faces. On these blank surfaces are projected cinematic images. With faces exactly superimposed and voices dubbed, the sculptures talk and otherwise express emotion. It is a weird and imaginative device, one that is further embellished by having the figures converse with live actors.

The continuing story involves the killing of Miss Balint's former lover, himself represented by a living sculpture, as well as such apparently subsidiary matters as the insidious cabdriver's ability to predict the horrors of the future. At one point, the heroine dismisses him from her home, saying he is ''an immigrant who doesn't fit and is trying to get high off me.'' As a sorcerer, he has, it seems, run out of tricks.

The author-director continues to pull scarves and rabbits out of his metaphorical hat. Chairs, tables, suitcases and other heavy objects thunder from the ceiling to the floor, threatening the actors - and jolting theatergoers. A life-size cardboard taxicab suddenly appears, then disappears in a puff of exhaust fumes. Eventually, a vision of the Virgin Mary, with a blue neon halo affixed over her head, descends from the theatrical heavens and the curtain falls. The audience on opening night seemed to wonder if this were the end of the play. Can anything follow a deus ex machina?

Intellectually, the play is sleight of hand, but Squat seems to have overcome its earlier obsession with a direct, overly graphic confrontation of illusion and reality. The mysterious ''Dreamland Burns'' has a hallucinatory fascination. City Nightmare DREAMLAND BURNS, created by Squat Theater; written and directed by Stephan Balint; set design, Eva Buchmuller, with Kuba Gontarczyk and Jim St. Clair; film, Frank Prinzi, cameraman; Anna Koos, film editor. At the Kitchen, 512 West 19th Street. WITH: Eszter Balint, Peter Berg, Jehnifer and Lillie Stein, Klara Palotai, Kuba Gontarczyk and Stephan Balint.

Copyright 1986 The New York Times Company