CONTRARY to popular perception, the film industry is not monolithic, but splits into three parts: There are the big studios, the independent producers and, pretty much at the bottom of the ladder, an army of passionate filmmakers who turn out low-budget theatrical movies, shorts, and documentaries.That group, many of them film-school graduates, relates to the rest of the industry approximately the way Off Broadway compares to Broadway. It is in many ways the most interesting, the most challenging, inventive, and, from a commercial point of view, the most risky and frustrating sector of the business. Thousands of men and women who are obsessed with filmmaking and with gaining a screen voice often scrape the bottom of the financial barrel to film the subject of their dreams. A great many of them spend years seeking investors and borrowing money from friends and relatives to produce that dreamed-about feature, documentary, or experimental short. Their expectations for recouping their investment are limited, but hope springs eternal. The fact is that most of these labor-of-love projects don't ever make it to any screen, here or abroad. At the same time, the college market is expanding. Public television and cable offer new opportunities, and the growth of international television has provided new customers for the small US independents who offer a view of America that is distinctly and often refreshingly different from that projected by Hollywood. What the small producers have to offer was evident at the recently-concluded Independent Feature Film Market in New York where more than 250 features, documentaries, and shorts were screened, along with trailers of "works in progress." According to Sandy Handelberger, program director for the Independent Feature Project which sponsors the annual event, about one-third of the films shown at the event eventually find a distributor. A couple will follow the rare example of "Roger and Me," which premiered at the market and was eventually picked up by Warner Brothers for a respectable theatrical and video career. Spike Lee and others also gained commercial recognition here. Quite a number of the films move out to international film festivals, which serve as an ideal showcase and a scouting-ground for both US and foreign distributors. According to Mr. Handelberger, the annual investment in low-budget independent productions runs between $40 and $50 million. Producers whose pictures were shown at the market exhibit frustration, anxiety, enthusiasm, and an iron determination. Julia Reichert, who lives in Yellow Springs, Ohio, screened her feature, "Emma & Elvin," which she defines as "a political romance." "I am one of the obsessed," Ms. Reichert laughed. "I am a child of the '60s. I come from a time when we believed - and I still believe - that the world can change and that people can change." Reichert, who described herself as "a regional filmmaker," started making shorts in the '60s. "Emma & Elvin" is her first try at a feature-length movie. It was made on a small budget. Reichert convinced 40 individual investors each to contribute $10,000, but admits that it was tough going. "You go into debt," she said. "I am over 40, a mother, and I am more in debt than I have ever been." Still, there are some bright spots on the horizon. She has a number of tempting distribution offers from both the US and abroad. The costs of these independent pictures vary, ranging from a very low $15,000 for a one-reel short to $300,000 or more for a full-length feature. Financing, apart from private sources, often comes from foundation grants and, sometimes, from the National Endowment for the Arts, and other state and federal agencies. For the most part though, producers rope in private investors willing to take the long-term view. Very often, actors and technicians are persuaded to defer salaries to enable the film to be made. This year the US Congress started to provide $6 million annually to the Independent Television Service to fund small independent productions. Foundation grants for "idea" or experimental films are difficult to obtain these days, and producers say that there is a stringent scrutiny of topics before government funds are allocated. "Unlike poetry, filmmaking is a very expensive form of self-expression," says Lawrence Daressa of Newsreel, a San Francisco-based company distributing independent movies to the college and high school market. His company showed Harlon T. Riggs's "Color Adjustment" at the Independent Feature Film Market. Its theme is "how network entertainment has shaped, mirrored, and sometimes distorted the social reality of black-white relations." Why do they undergo the agony of putting these projects together? "Many of these producers have either come from the Hollywood institution, or they are trying to get into it," Mr. Daressa said. "They are disgusted with the current timidity of the media where they can't express themselves in either form or content. So they become their own producers and sometimes even their own distributors." He also noted that, while colleges and libraries were generally open to all kinds of ideas-on-film, high schools were virtually closed to them. Tracy McArdle, graduate of a film school, said it took her some seven months to shoot a nine-minute short, "White Boys Can't Dance," which she produced with a schoolmate. "We started it as a school project, and it became our baby. It'll be great for festivals," she noted. Market director Handelberger, surveying the crowded lobby of the Angelika Film Center, said the festival was growing every year. "If you want to appreciate what real passion can do, you must come here," he said. "These producers and directors are proof that the art of moviemaking is still very much alive."