(FORTUNE Magazine) – SOFTIMAGE ''I dream for a living,'' director Steven Spielberg once said. Turning those dreams into movies is big business for Softimage. The Montreal company writes the 3-D graphics software that lets filmmakers give starring roles to special effects. In Death Becomes Her, for example, it was Softimage software that enabled Industrial Light & Magic -- the special effects lab run by filmmaker George Lucas -- to turn Meryl Streep's head a full 180 degrees. Coming soon: Softimage-generated dinosaurs that will romp through Spielberg's Jurassic Park next summer. Softimage products have a competitive edge because they are easy to use. CEO Daniel Langlois, a former graphic designer, recalls how he used to spend weeks manipulating the images of rival software products before he got what he wanted. Softimage's program -- Creative Environment -- dispenses with such tedium, as well as with the need for software engineering skills. Says Industrial Light software manager Tom Williams: ''With Softimage our animators can work twice as fast, even though the jobs we're being asked to do are twice as hard.'' The company's 3-D graphic modules sell for $9,000 to $55,000. (Quips Williams: ''It would have been a lot cheaper to strangle Meryl.'') But they are a bargain considering the legions of animators and engineers that are often needed to make a video or film. And with animated films gaining in | popularity, the investment quickly pays for itself. Analyst Robert Herwick of Hambrecht & Quist expects the $60-million-a-year 3-D software market to grow 30% annually for the next five years. Herwick says Softimage's fiscal 1993 sales and earnings will grow even faster, with net income rising 60% to $4 million on a 64% jump in sales, to $23 million. The company went public in July at $9 a share. Its stock traded recently at $13.25, or 16 times Herwick's estimate of 1993 earnings per share. Softimage has also staked out markets far afield from Hollywood: architecture, industrial design, and the burgeoning game business, where SEGA Corp. uses Softimage to develop graphics for its arcade videos. Most important, though, is Softimage's plan to hard-sell 2-D graphics, a $300- million-a-year market. There, videotape editors will be able to use the digital software -- instead of million-dollar analog and other specialized equipment -- to add, say, the scores, statistics, and additional graphics that show up on televised football games.

HALSEY DRUG Halsey manufactures narcotics and controlled drugs, including generic versions of Percodan, Demerol, and Darvon. So when CEO Jay Marcus discusses ''barriers to entry,'' he knows what he's talking about. The Drug Enforcement Administration assigns production quotas for each of these drugs at the start of the year. Although there are added costs and difficulties in pursuing this niche -- raw materials and the finished drugs must be kept in a DEA-approved vault at Halsey's Brooklyn, New York, headquarters, for example -- the extra effort required keeps competitors scarce. Halsey cuts costs by making the raw material for other drugs -- including generic versions of Doxycycline, an antibiotic used against Lyme disease -- at its plant in Indiana. Boasts Marcus: ''If I can produce my own chemicals, I control the market.'' Halsey stock recently traded for $6.31, or 18 times the per share earnings analyst David Saks of Gruntal & Co. forecasts for 1992. He sees profits jumping 45% to $2.5 million on a 34% rise in sales to $50 million. Halsey has some 25 generic drugs awaiting FDA approval and several AIDS-related drugs in the pipeline. Next year, Halsey will benefit from overseas sales of the raw material for AZT, used to treat AIDS and HIV-positive patients. Says Saks: ''That will bring in more than $5 million in sales -- relative to Halsey's size, the same as a $1 billion drug for Merck.''

RADIATION SYSTEMS In 1994 the National Radio Astronomy Observatory in Greenbank, West Virginia, will aim its transmitting and receiving dish -- a full 328 feet in diameter -- toward the heavens and scan the cosmos. Radiation Systems workers, as prime contractors for the $55 million telescope, may feel like the real stars of the event. In the 1980s, CEO Richard Thomas recast the Sterling, Virginia, company from a Pentagon-dependent subcontractor into a basketful of ten specialized antenna makers. Helping Radiation Systems: air traffic growth, which has meant more airport antennas for the FAA. The company also just finished installing 9,600 dishes for a Whittle Communications TV network. In fiscal 1992, Radiation Systems earned $10.6 million on sales of $127.1 million. Merrill Lynch analyst Joseph Bellace sees fiscal 1993 profits rising 15% to $11.8 million. Shares traded recently at $12.25, or nine times his earnings per share estimates.