(FORTUNE Magazine) – At Dell Computer's annual shareholders meeting this July, there are no celebratory baseball games or t-shirts like the ones at Warren Buffett's now famous Berkshire Hathaway "event" in Omaha. But that doesn't make it any less of a love fest. People have streamed into Austin, Texas, in the midst of a sweltering summer, to get a personal peek at the PC company's 32-year-old founder and chief executive, Michael Dell. A palpable buzz goes through the ballroom of the Austin Four Seasons as the anything but charismatic Dell walks in to make his presentation. Like a politician on a campaign tour, he is quickly surrounded by admirers, arms outstretched for a handshake. The autograph seekers range from a 10-year-old computer buff to a grateful, wide-eyed retiree.

Eventually Dell makes his way up to the dais. He puts his head down for a moment, then looks up and grins coyly as a slide pops up on the huge screen behind him. It's a chart of Dell's stock over the past three years, compared with six other bigtime bull-market success stories: Coca-Cola, Intel, Microsoft, Gillette, Cisco Systems, and rival PC-maker Compaq. The upward slope of the Dell line is easily twice as steep as the others', and those who have most enjoyed its rise--the shareholders--can't help but "ooh" and "aah" at its drama. Dell looks over the crowd, pauses, then grins again: "And that concludes our presentation." The applause is deafening.

Dell goes on to give more details--about sales and earnings, the future challenges and opportunities--but the big point has been made: Owning stock in his company over the past few years has been like owning a winning lottery ticket. From a split-adjusted low of $0.39 a share in 1990, Dell Computer stock has soared to $80--a gain of more than 20,000%. (By comparison, Microsoft's stock is up 2,600%.) A $10,000 stake at Dell's 1988 IPO is now worth more than $1 million.

The reason for this meteoric stock rise is simple enough: Dell Computer has become the driving force in the PC business. In just a few years the company has gone from a compelling sideshow in the industry to a fast-charging threat to big boys like Compaq and IBM. Thanks to a low-cost, direct-sales model--which the competition is now rushing to emulate--Dell's global-market-share rank has climbed to a virtual tie for No. 3, from No. 8 just over a year ago (see the story following this one). You may remember Dell Computer as the cute company that started in a dorm room. Well, that was then. Today's Dell has stormed into the business-to-business market, selling most of its PCs, servers, and workstations to the likes of Ford, Boeing, and foreign giant Deutsche Bank. Total sales have jumped from $159 million, when the company went public in 1988, to an estimated $12 billion this year--an average annual growth rate of some 54%. What about net profits? This year they should come in at around $900 million.

In the process, of course, the company has become a glittering Wall Street star, the one stock able to lift money managers above the recent soaring market indexes. After a 109% jump in the last half of 1996 and a 121% gain in the first half of this year, the stock rose another 46% in the month of July alone. "The stock has defied gravity," marvels one Wall Street insider. "It hasn't mattered if the market goes up or down. If you short this stock, you get carried out."

No one has benefited more from all this than Michael Dell himself. A 16% owner in the company, Dell is now the richest man in Texas--richer than any oil baron or real estate tycoon, more flush than Perot or any Bass. Over the past year, a guy who can't say where he was the day J.F.K. was shot because he wasn't born yet has watched his holdings appreciate by $3.5 billion, an average of almost $10 million per day. His net worth at last report: some $4.3 billion.

And yet, for all Michael Dell's accomplishments as a businessman, a communicator with Wall Street, and a personal wealth generator, he is rarely acknowledged as a titan of technology. There is a sense that Dell is something less than he appears, a youngster who just happened to be in the right place at the right time and, in effect, got lucky. "I'm no Larry Ellison," he admits, referring to the freewheeling and eminently quotable CEO of Oracle. He knows he lacks the swagger of, say, a Steve Jobs. If his company's products are derided as commodities--boxes, nothing more--and his business model, of direct sales to customers, as declasse, well, so be it. He's got other things on his mind--his customers and his competitors, to name two.

Which is what makes the attention he's received from the ultimate tech titans, Intel's Andy Grove and Microsoft's Bill Gates, so telling. Recently Dell and Grove dined together at the Lion & Compass in Silicon Valley, where Dell's mission in part was to make sure Intel could keep up with his company's demand for chips. Says Grove of Dell: "He tackles jobs others think are overwhelming and prevails. Michael isn't afraid of anything."

Gates paid homage to Dell, whose company is among Microsoft's biggest customers, by flying down to Austin this past spring. They discussed everything from Dell's burgeoning server business to the company's website, which now accounts for $2 million in daily sales, or some 5% of the company's business. Gates--who more than any other man in the universe is betting on Internet commerce, and termed Dell's profitable website "pretty cool"--sees similarities in their talents. Aside from the fact that both men are billionaires (Dell is actually richer at age 32 than Gates was), they also have strong ideas about where the world of technology is headed and about their respective companies' roles in that progression. "We have both stuck with our convictions, and learned from our mistakes," says Gates. "Michael has the same passion for the industry I do." Says Dell: "We're in the business of dramatically reducing the cost of distributing technology. To do that, we are going to get closer and closer to our suppliers and our customers."

The reason Dell's company has become such a juggernaut has nothing to do with exotic software or cutting-edge chip technology. Instead, it's a matter of execution. Selling computers directly to customers is hardly an earth-shattering concept, but then again neither was Sam Walton's idea of putting Wal-Mart megastores into rural areas. What made Walton a genius (and a multibillionaire) was a God-is-in-the-details vision of how the whole operation should work. Michael Dell's distinctive edge is his understanding of that same landscape in the computer business. "I don't think Michael gets enough credit," says Dell vice chairman Mort Topfer. "He has an incredible sense of the market. And he has created every element of the Dell model."

Here's one simple example: Although the company's computers have long had some of the highest quality ratings in the PC industry, Dell recently became obsessed with finding a way to reduce his machines' failure rate. The key, he came to believe, was to cut down on the number of times that each hard drive--perhaps the most sensitive part of a PC--was being handled during assembly. So he insisted that the number of "touches" be dramatically reduced from an existing level of more than 30 per drive. Production lines had to be revamped, but eventually the number of touches was trimmed to fewer than 15. Soon thereafter, the rate of rejected hard drives fell by 40%, and the overall failure rate for the company's PCs dropped by 20%.

You can't attribute an improvement like that to "luck." Michael Dell, it turns out, is a master at optimizing the details of his business. (In fact, it was Dell's idea, personally, to try selling PCs on the Web, when others on his senior staff were skeptical that a market would materialize, and he pushed the project ahead.) Dell may not be Mr. Excitement, but his deliberate approach allows him to sweat the little things that keep his company moving. There is no such thing as an accidental billionaire.

Most billionaires wouldn't choose to walk halfway across San Francisco to get to dinner, but that is Michael Dell's preferred mode of transit during a recent midsummer business trip where we caught up with him. Casually dressed in a gray button-down shirt and black pants, Dell moves down the street unrecognized. Such anonymity is a luxury that Bill Gates no longer has and that Dell himself could well lose one day.

On the other hand, if Dell's behavior this particular evening is any indication, a steady stream of stares wouldn't slow his stride--indeed, wouldn't even be noticed. There is a citywide demonstration under way by thousands of militant bicyclists who want to restrict car traffic. At times the demonstration grows violent, and before the night is over 250 cyclists will be arrested. Dell walks straight through one fracas, where tattooed, body-pierced believers howl, pound on cars, and scuffle with police. He seems almost oblivious, so intent is he on explaining the tax advantages and infrastructure issues behind the location of a new manufacturing plant.

Dinner is at Stars, a high-energy restaurant near City Hall, and Dell slips in without fanfare. When the others at the table order drinks, he asks for a glass of white wine, just to be polite. But the glass sits untouched in front of him for the whole meal. Later he admits that he rarely drinks, though you'd think this evening might be an exception: That day Dell's personal net worth dropped by $150 million when the company's stock fell $3 a share. His response is the stuff of press releases but rings true nonetheless. "Employees ask me about the stock all the time," he says. "I tell them over the short term, there's nothing I can do." This is someone who knows what he can control and what he can't.

Throughout the dinner Dell is friendly and soft-spoken, but it becomes clear that as a businessman, he has a ruthless side. He will look you straight in the eye and tell you exactly how each one of his competitors is poised to fail. IBM: "There's no real momentum there." Apple: "We're taking huge chunks of the education market from them." Packard Bell: "Cruddy machines. Look at their repurchase rate." Gateway: "They're focused on first-time users. How many first-time users will there be in the year 2010?"

Dell's snidest comments, though, are reserved for Compaq. Run by the Teutonic Eckhard Pfeiffer only 160 miles down the road from Dell's Austin headquarters, in Houston, Compaq has more than twice Dell's sales and market share, and there's a real Texas rivalry between the two companies. Some Dell executives seem to have an inferiority complex when it comes to Compaq (as in "we're just as good as Compaq"). But Compaq's recently announced plan to sell some PCs directly to customers has hardly put the fear of God in Michael Dell. "It's like we're the best baseball player and Compaq is the best basketball player," he says with a smirk. "Now they want to play baseball." The implication is that Compaq will fare no better than Michael Jordan did when he tried his hand at hardball--and quit after batting just .202 for the minor-league Birmingham Barons.

Pretty strong talk for a guy who only 13 years ago dropped out of college. Dell grew up in upper-middle-class neighborhoods around Houston (Meyerland and Memorial). His parents moved to Texas from the Bronx--dad is an orthodontist and mom a broker with Paine Webber--and they wanted young Michael to become a doctor. By the time he was in junior high, though, Dell was hooked on computers. He loved to take the top off his Apple II to check out its motherboard. There was also a profit motive buzzing in young Dell's brain: "I always knew I wanted to run a business someday."

To please his parents Dell enrolled as a premed at the University of Texas in 1983, but by then he was really only interested in tinkering with computers. That first semester found him buying up remaindered, outmoded IBM PCs from local retailers, then upgrading them in his dorm room and selling them--not just around campus, but literally hawking door to door to local law firms and small businesses. One day his roommate piled his ever-growing inventory up against the door. "He was kind of frustrated, I guess," says Dell. "So I moved."

When he told his parents that he wanted to drop out at the end of his freshman year, they were furious. He agreed to go back if the summer's sales proved disappointing, but instead the business took off--he sold $180,000 worth of PCs his first month--and Dell never returned for his sophomore year. He quickly realized that instead of upgrading older machines, he could buy components and assemble the whole PC himself more cheaply. Then he could sell the machine with his name on it directly to customers at a 15% discount to established brands. Demand was astounding right from the start, and Dell was able to fund his initial growth internally. (That's one reason he's become so rich today: He's never had to share with a venture capital partner.) Later he got bank financing using his receivables as collateral, and before long Wall Street took notice. The company did a private placement through Goldman Sachs in October 1987 (right after the market crash), then raised $30 million in an initial public offering in 1988. Dell's take: some $18 million.

For many tech startups these days, that would have been the pinnacle: a quick-hit payoff, and time to move on to the next promising venture. The 23-year-old Dell, though, was just getting started. Sales leaped forward to more than $800 million by 1991. In 1992 Dell was hoping to pass the $1.5 billion mark; the company blew right past that figure and did $2 billion.

That pace was too much for the young entrepreneur to handle, and the wheels nearly came off. A major cash crunch hit as the company rushed to expand. Design flaws emerged in Dell's notebooks. And the dearth of senior managers began to show. The company ended up reporting a loss of $36 million. Skeptics declared the Dell dream over, and, indeed, many high-tech companies have rolled over and died under similar circumstances. Instead, Michael Dell had the vision--and ironically, the maturity--to take his creation to the next level. Recognizing that he could no longer run the company by the seat of his pants, he began recruiting experienced empire builders to assist him. At the top of the pyramid, for instance, he brought in Mort Topfer, a seasoned executive from Motorola, to handle day-to-day operations. That choice was inspired: Like Dell Computer, Motorola is a high-tech component assembler, so Topfer had ample experience with the ins and outs of purchasing and manufacturing. He also had helped Motorola set up a manufacturing facility in Asia, which Dell was on the verge of doing itself; Topfer recommended Penang, Malaysia--precisely where he'd brought Motorola. "Plus, Intel and a whole bunch of our other suppliers are in Penang," says Topfer.

Aside from Topfer, Michael Dell also brought in other well-regarded managers, such as Kevin Rollins, an organizational expert from Bain, to run the American operations. And he stole away key Apple executives from that company's Powerbook team to fix his notebooks. Result? Within 12 months the company was righted, and the following year profits climbed to $149 million. The company has never looked back.

At first, even after Dell pulled his company through that troubled time, Wall Street continued to have doubts. How many customers would really be willing to buy computers directly from a manufacturer? And did Michael Dell really have the skills to guide the company in a dog-eat-dog industry? The answer to both questions, of course, came in the continuing explosion in Dell's business. Higher sales proved that the direct market was far larger than investors had anticipated, and higher profits showed that Michael Dell was getting the job done. As the company consistently exceeded Wall Street's expectations--right through to today--the stock soared.

Nestled along a dammed-up section of the Colorado River in Texas hill country, Austin has long been known for its slackers and Willie Nelson shows. But lately that's changing. Today it's no exaggeration to claim, as Austinites are wont to, that this metropolitan area of one million is one of the nation's most important high-tech centers after Silicon Valley--inevitably branded Silicon Hills. Motorola and Advanced Micro Devices both have chipmaking facilities here, and scores of smaller, high-profile companies like Tivoli Software also call Austin home.

But none have had greater impact on the city than Dell. The company now employs 9,000 people in Austin and is hiring an additional 100 a week. Thousands of others are riding the Dell boom in construction and service jobs, as the company races to add millions more square feet of work space. "Austin has gone from a big, small city, to a small, big city, and Michael Dell has played an anchor role," says Mayor Kirk Watson. "It's like watching one of the neighborhood kids grow up to become a big success. You feel like you're a part of it."

Dell's headquarters--15 miles north of Austin in Round Rock--is a cluster of gigantic, chalk-white, neo-Bauhaus structures. The CEO works on the second floor of the main building, in one of only two private offices in the entire complex; Mort Topfer has the other. Dell loves to talk "speeds and feeds" with his engineers, and spends one day each week checking out the innovations at one of the site's tech facilities. He also spends a ton of time with customers, including a recent visit to Chicago where he participated in a sales presentation to senior executives. For Dell, customer contact isn't just a question of boosting the business; it's staying up on and in tune with an ever-changing market. ("Let's just say Michael has kept us away from making the mistake of going into PDAs, subnotebooks, and DVD players," says Rollins.)

The company's production model has come a long way since Dell's dorm-room days. His company now moves about four million PCs, notebooks, servers, and workstations a year. Most are sold to businesses, not consumers. Buyers call Dell's 800 numbers or log on to the company's Website, where they can configure their own model and then watch as their customized PC is priced by features on the screen. (Enter a credit-card number, hit Return, and you're done.) Or in the case of big customers like Boeing--which buys an average of 160 Dells a day--customers simply tap the shoulder of a dedicated sales rep working inside their company.

Each PC is made to order, yet the whole process from phone call to loading onto a delivery truck takes just 36 hours. Orders are instantly relayed to one of Dell's three plants--in Austin, Penang, or Limerick, Ireland. You won't find any inventory there, though. "All our suppliers know that our components must be delivered within an hour," says Austin plant manager John Varol. Chips, boards, and drives are kept in trucks backed up into bays 50 feet from the beginning of the line. There's no inventory of finished goods either--Dell learned from his initial foray into the computer business in college that he doesn't want any of his products remaindered.

On Saturday morning, during that same midsummer trip to San Francisco, Michael Dell is out for a run along the Embarcadero. Dell isn't a particularly graceful runner--he scoots along flat-footed--but he's pretty damn fast, especially considering his 6-foot 180-pound frame. "You know, there are still people who don't get it," he says, making a turn at Fisherman's Wharf. "They think that we're just a niche company serving a small group of customers. How could that be, if we're growing faster than anyone? That's not a claim--it's the truth."

It's also a situation that not everyone believes can last. Some question whether Dell's direct-sales model can be adapted to overseas markets. ("I think our numbers speak for themselves," responds Topfer. "In Europe we're No. 3, and growing 3 1/2 times faster than the market.") Others question whether Dell's shares can go much higher: Recently analyst Andy Neff of Bear Stearns downgraded the stock. (On the other hand, Morgan Stanley's Mary Meeker recently predicted that "the stock will knock up to $100 in the next 12 months.")

In the short term, the company could be tripped up by any number of problems: a slowdown in PC sales, say, or a broad stock-market decline. Six months from now Dell's stock might be down $10 or $15 a share. Over the long haul, however, it's probably a mistake to bet against this company. For an increasingly sophisticated computer-buying public, the company's allure will only rise. Even if Compaq and the others move aggressively into direct selling, Dell has a huge head start. "We already have a quick-ship plan for large customers where we can deliver a machine within 48 hours of an order," Dell explains.

"Dell has always been able to figure out the next wrinkle to stay ahead," notes Andy Grove. "It's in their genes." Told of Grove's comment as he trucks back toward Market Street, Dell nods. He's certainly not standing still.