They bake what they like at this modest bakery by the sea

For the past five or six years, Portsmouth, N.H., has been gathering a reputation for the quality of its food. Restaurant owners and chefs like to quote a New York Times article that once called the small seaport town ''The Restaurant Capital of New England.''

It's true. Little by little, the subheadings for the restaurant dinners are taking on a gourmet shine, like Penelope Brewster's Ceres Street Bakery, where much of the bread and many of the desserts for Portsmouth's restaurants are made.

Ms. Brewster came to Portsmouth to open a small shop to sell jewelry of her own design. ''It makes a nice avocation,'' she said recently. But after two years of rising rents and slow traffic, she decided that the town needed a bakery more.

That was three years ago, and now she and her staff are turning out a wide range of edibles, from simple whole-wheat baguettes to a complicated mocha pecan torte rich with buttercream.

Ceres Street Bakery sells its European pastries by the slice. Customers eat at small tables, or wander out and down the street with dessert cradled in a paper napkin.

The bakery, which moved earlier this year, is now on Penhallow Street, having gone through a sea change at the beginning of this year. Ms. Brewster had been renting space in the town's most picturesque wharf section, among shops and restaurants inhabiting the old warehouses along Ceres Street next to the water.

''Now that we're away from the heavy tourist traffic, we've become closer to what I had in mind, a small-town bakery that services the town,'' Ms. Brewster says.

The open kitchen seems to go night and day, as some of the energetic young staff begin at 5 in the morning with the breads, Danish, and croissants. In early afternoon they bake cakes, pies, and tarts - either something traditional that still grips their attention, like a buttery, tangy lemon tart, or a brand-new invention.

Great bakers these days generally fall into two categories: the trendy, who might cut a half pound of brie into a pound of brioche dough and call it cheese bread, or the natural and sincere, who manage to cram five whole grains into one loaf and come up with different, but no less spectacular, results.

Then there are individualists like Ms. Brewster, who cull a little from both and produce a classic Sachertorte just to throw a spanner into the categories.

She bakes what she likes, and those on the staff bake what they like. The results are an eclectic blend of the familiar, the simple, and the elegant.

''We started out with recipes from my mother, who makes great bread, and all our friends - and then began to develop our own ideas.

''Without being a fanatic, I keep all of the ingredients as natural as possible and use no preservatives. It's important not to have leftovers. I'd much rather run out than be left with any of the breads the next day.'' Ceres Street Bakery Apple Tart Crust: 1 3/4 cups sifted, all-purpose flour 1/2 cup sugar 1 large egg, beaten 1/2 cup plus 1 tablespoon unsalted butter

Mix flour and sugar in mixing bowl; cut in beaten egg and butter thoroughly. Dough will be quite crumbly. Force into a ball, wrap in plastic wrap, and refrigerate at least 1 hour.

Roll out on lightly floured board to a 12-inch circle. The dough - like all sweet doughs - is hard to handle. Press into a 10-inch springform pan, pushing dough up to a 1-inch rim.

You may also press dough into a 10-inch pie pan, pressing together any tears and patching at will. The texture of baked crust will still be flaky. Chill as you prepare filling. Filling: 6 large cooking apples 1 cup raisins 1 1/2 cups walnuts 1/3 cup sugar 4 tablespoons melted butter

Peel, core, and quarter apples. Grind walnuts in food processor or blender and combine with raisins and sugar in a bowl.

Sprinkle half of nut mixture into prepared crust and arrange apples on top, overlapping slightly. Sprinkle with remaining nut mixture and drizzle melted butter on top. Bake in a preheated 375 degree F. oven 50 minutes to 1 hour, or until apples are soft. Cool. Serves 8 to 10.