PORTO ALEGRE, BRAZIL

Dilma, 12 years old, was standing on a downtown street corner early this year when a well-dressed woman asked her to come to a dance party. "When I got there, there was no dancing," said the girl.

Instead, the fifth-grade dropout was taken to a clandestine brothel to work with three other minors. The four girls were never allowed to leave the building and were forced to have sex with men for as little as $30. When they tried to escape, guards beat them with a stick.

Two months later, Dilma - whose real name cannot be published by order of a Brazilian judge - was freed by authorities acting on a telephone tip.

She was relatively fortunate. Hundreds of thousands of minors in Brazil are forced to spend years working as prostitutes after being recruited by agents working for a network of brothels, bars, hotels, and nightclubs, say human rights activists, child advocates, and police investigators.

Recruiting girls can be as easy as picking them up on the street, as in the case of Dilma. Most Brazilian cities have hundreds of street kids fleeing poverty, as well as violence and sexual abuse at home.

"I did what I had to do to survive," says 15-year-old Valeria (not her real name), who had been a prostitute for four years. "I knew what I was doing."

Most often, gang leaders send recruiters to rural areas to lure girls to the cities with promises of jobs as clerks, maids, nannies, models, and waitresses. When the girls arrive, they are told that they have huge debts for transportation, housing, and food, and they must repay through prostitution.

In the Amazon River basin, girls have been promised jobs as waitresses or cooks in gold mine camps and then beaten or killed if they try to escape from brothels. In such remote regions, gold mine owners operate like local kings and have been known to authorize "virginity auctions," whereby new arrivals - some as young as nine years old - are sold to the highest bidder, according to Gilberto Dimenstein, author of "Girls of the Night," the first book to document the child sex trade in Brazil.

In the northern coastal cities of Salvador, Recife, Natal, and Fortaleza, the child prostitution network includes travel agents, luxury hotels, restaurants, massage parlors, and taxi drivers, who act as mediators for foreigners in the "sex tourism" trade.

In the impoverished northeast, where many families earn less than the Brazilian minimum monthly wage of $112, parents sometimes sell their children to brothels. In the state of Piauí, a father traded his daughter last year to a highway brothel for 30 boxes of beer, according to the Brasilia-based nongovernmental agency Reference Center for Studies and Actions for Children and Adolescents.

In many cases, the gangs are protected by the police, who receive bribes to look the other way. Some policemen even supplement their low salaries by moonlighting as security guards for brothels and nightclubs. Not surprisingly, impunity is the norm.

"Every time we alert the police about a raid, all we find are girls of legal age of 18 praying with rosaries," says Mariza Alberton, a member of the Porto Alegre municipal Children's Legal Rights Council.

Porto Alegre, the modern capital of the southern state of Rio Grande do Sul, is known for its high standard of living and a population of mostly Italian and German descent.

Yet the city is also home to Vitor de Jesus, the "biggest pimp that we found during our investigation, with an organization that moved $572,000 through various bank accounts," according to former federal deputy Moroni Torgan, a member of a 1993-94 congressional commission that investigated child prostitution throughout Brazil.

A portly man, Mr. de Jesus is known locally as "Buda." In 1991, he made national headlines after two investigative reporters for the Porto Alegre daily Zero Hora documented his activities under the banner headline: "We Enter the Buda's Empire."

De Jesus, a retired policeman, was reported to own two downtown hotels and three nightclubs, employing some 50 teen prostitutes who were obliged to serve between 10 and 15 customers a night. His headquarters was the seedy Hotel Aliado.

Whenever de Jesus needed new employees, the report said, he sent recruiters to the cities and villages of Rio Grande do Sul and the neighboring states of Santa Catarina and Paraná. They typically placed radio ads promising well-paying jobs on the popular "message hour" that rural residents use to send messages to their loved ones.

The Zero Hora reporters, who posed as nightclub owners seeking child prostitutes, visited 45 cities and 15 rural communities in the three states and found they could buy the services of 33 minors from taxi drivers, street pimps, and bar owners for a total of $300. "It was as easy as entering a toy store and buying a doll," says Carlos Wagner, one of the journalists.

The series shocked Gaúchos, as state residents are known. "Many still don't believe it," says Maria do Rosário, a Porto Alegre city councilwoman who is leading a City Hall campaign against child prostitution. "They typically believe that this is something that only happens in the poor northeast."

The series led to a police investigation in which de Jesus was indicted on charges of corrupting minors. He remains a free man. The case is pending and he is "continuing to exploit girls in downtown Porto Alegre hotels," according to a 1995 human rights report by the Rio Grande do Sul legislature.

Critics blame shoddy policework and a slow and overloaded justice system. However, Nelmo Bonnett, Porto Alegre's Metropolitan Chief of Police, says it's difficult to build a case against de Jesus and others without catching them in the act. De Jesus denies all charges, claiming to be a car salesmen even though he has testified that he doesn't own or work at a dealership.

"There is no doubt that he is involved," says Mr. Bonnett, "but his girls are afraid to testify and the hotels and nightclubs are always in the names of others."

A municipal law states that establishments closed for employing child prostitutes in Porto Alegre can reopen after 30 days if it's a first offense. In 1995, eight hotels and 10 nightclubs were closed by the police and subsequently reopened.

"It's frustrating," says Ivone Cataneo, police chief for a special precinct created in 1994 to expedite crimes against children. "We bust them and they come right back."

"We are losing this war," adds Councilwoman do Rosário, who in 1995 introduced a law to penalize hotels and nightclubs that allow minors entrance without parental supervision. "There is nobody in jail."

Despite their freedom, the gangs have become more cautious, experts say. Underage prostitutes no longer line up along city streets. Instead, many have been discreetly placed in motels or nightclubs located on city outskirts and furnished fake identifications that show them to be of legal age.

Maria Lúcia, age 13, worked in a nightclub in the suburb of Cachoeirinha with nine other minors, who had been bused in from Santa Catarina.

Valeria was working at a nightclub in the nearby city of Tacuara. Both girls were recently picked up in police raids conducted by Ms. Cataneo's precinct.

Currently, Maria Lúcia (not her real name) and Valeria are studying at a public school while receiving psychological counseling and medical help, the latter of most importance to Valeria since she recently was told that she has the AIDS virus.

"Prostitution is no future for a minor," she says. "You just die slowly while giving money to somebody else."