William Masters had often rehearsed the moment in his head when, on one of his late-night walks, he would pull out his 9 mm pistol, level it at a criminal and shout, "Freeze!"

It was his duty as a citizen, he said in an interview last week, to be armed, trained and ready to defend the victims of crimes.It happened a little differently the week before last. Beneath an overpass of the Hollywood Freeway at 1 a.m., Masters confronted two young men who were spraying graffiti, argued with them and shot them, killing one, 18-year-old Cesar Arce.

Police accepted his assertion that the men had threatened him with a screwdriver and tried to rob him, and he was released from custody without being charged. Instantly, Masters became the latest celebrity in Los Angeles, a vigilante hero to many people, the toast of talk shows and letters to the editor.

"William, you're not a hero to me, you're a saint," said Guy in Palmdale, a caller to the "John and Ken Show" on KFI-AM radio.

Another caller, Diane in the Van Nuys district, said, "I don't care if he's Looney Toons or what, but we need more guys like him around."

Since the shooting Jan. 31 in the Sun Valley neighborhood in the San Fernando Valley, Masters, 35, who works as a movie extra, has fed these sentiments with pointed comments on radio and to reporters that express the kinds of fears and resentments that appear to animate people like Guy and Diane.

"People were relieved that here was a murder victim who was not murdered," Masters said. "Instead, one of the murderers died."

Asked if he was afraid of facing charges, he said, "Where are you going to find 12 citizens to convict me?" Describing his assailants with a racial slur, he said, "This situation is what everybody lives in fear of."

The real villain, Masters said, was Arce's mother. "She murdered her son by being an irresponsible, uncaring parent," he said. "Nobody who has been raised by responsible, caring adults goes around making armed robberies."

Masters' actions, and his words, have become a focal point in a city where graffiti on walls and freeway signs symbolize to many people a spread of crime and deteriorating neighborhoods and an inability of government to maintain order.

Graffiti-busting is one of the few ways citizens have found to take the law into their own hands, forming neighborhood groups to hunt down young vandals and report them to the police.

Masters went one step further, and people are now comparing him with Bernard Goetz, a white man who shot four black youths on a Manhattan subway train when they threatened him with a sharpened screwdriver, and with the main character in the recent movie "Falling Down," in which a frustrated man rampages through Los Angeles exacting vigilante justice.

"Kudos to William Masters for his vigilant anti-graffiti efforts and for his foresight in carrying a gun for self-protection," wrote Sandi Webb, a member of the Simi Valley City Council, in a letter to The Daily News.

"If Sun Valley refuses to honor Masters as a crime-fighting hero, then I invite him to relocate to our town. I think he will find Simi Valley to be a much more compatible place to live."

It was in Simi Valley that an all-white jury found four police officers not guilty of assault in 1992 in the beating of a black motorist, Rodney G. King.

As with so many disputed issues here, race and ethnicity are moving again to center stage. Masters is white and those he shot were Hispanic men.

Wednesday, a group of Hispanic lawyers demanded a reopening of the investigation of the shootings by Masters. When District Attorney Gil Garcetti denied the request, they said they would call for a federal civil rights investigation. They noted that Arce was shot in the back.

Arce's sister, Lilia, has been her brother's chief defender, trading verbal jabs with Masters and saying it is his mother who is to blame, "for making that kid so paranoid."

"He's not a hero," she said. "He's a killer."