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The transformation takes place around midnight, and nobody seems to mind: The crowded basement, ’til then shaking with heavy rap beats from the record player, turns into a jungle of tiny, vibrating sounds. Splinters of jazz, exploding from half a dozen instruments, penetrate the massive rhythm that solidly bangs on.

It’s Sunday night, and Chicago jazzers Liquid Soul have just climbed the stage of the Elbo Room, a dark cellar bar tucked away in an equally dark corner of Lincoln Avenue.

But the deejay, a very young man in T-shirt and baggy trousers, sticks to his turntables-despite the fact that a saxophone, guitar and electric organ have appeared on stage. The records, mostly hip-hop, define the ground the band will conquer. The deejay mixes. He scratches. And the groove rolls over it.

This isn’t a jazz concert as it used to be. There are no old men in the audience, concentrating on obscure solos; there are no solemn-looking experts tracing the tunes. Here, the crowd is young, and made up of people who look as if they would get past the doorman of the trendiest rock or house music club.

What people see and feel in the Elbo Room is a sensual reunion: Some decades ago, jazz and dance music were a happy, swinging couple. Now they have fallen in love again, and they try all sorts of modern moves: They break dance to hip-hop beats, they sway to salsa rhythms, they jump and bend to funky tunes. And sometimes they even stamp to hammering house punches.

The new style, called acid jazz, comes from Europe and is now taking over the United States. It has nothing to do with acid-and only a little bit with traditional jazz. Rather, it is defined by a mixture of genres-and its experimental drive and virtuoso eclecticism. It is old jazz with a new beat, live music blended with the latest deejay sounds.

“The name was once a joke to distance us from the jazz establishment,” says Edward Piller, who invented the term when he called his London record label “Acid Jazz” in 1989. “But today it doesn’t mean anything anymore.”

Toward the end of the ’80s, it did. Acid house, the big, bold brother of smoother house music, had just sparked a drug-inspired dance explosion in European clubs. Though acid jazz sounds completely different, it has its roots in similar production techniques. Computers made cheap sampling technology available and spurred the mixing of digitally manipulated sound bites.

British deejays were the midwives of the new, effervescent jazz-style, giving birth to a creature with at least three parents: jazz, soul and funk. They used the same technology as acid house, sampling records from the ’60s and ’70s, but they loathed house for its supposedly inhuman precision. In contrast, acid jazz developed into a live music culture as bands adapted the style mixture on stage.

London, long the capital of Europe’s international music scene, became the homeground for this new breed of dance music, which quickly took over the continent. Groups like Galliano, Incognito and the Brand New Heavies gave their trendy audience something they hadn’t heard in the musically rough ’80s-relaxed, cheerful tunes for hip people of all colors to dance to.

And as the number of bands increased, the style became ever more diversified. Clubs opened, a fashion was invented and acid jazz set out to become a worldwide best seller, which it proceeded to be in Europe and Japan. The United States, however, wasn’t biting.

Goatees and berets dragged down to the ears, the height of acid jazz fashion, are still a rare sight in the States-even in the Elbo Room, which claims to run the only regular acid jazz night in town. A few eclecticists have adopted the ’60s style considered hip and cool in London: striped shirts and baggy jeans in simple, subdued colors. The band, the supposed role model, obviously doesn’t care about clothes at all.

The sound, too, is still a minor fashion. “The scene is very small, but it’s growing,” says Deejay Smash, who started New York’s leading acid jazz club Giant Step in 1990 and puts out records on his New Breed label. “On our first club night, we had 20 people there. Now it’s up to 2,000 every week.”

The inspiration for the U.S. scene came from a different source, deep in the heart of the American underground. “In 1990, hip-hoppers like A Tribe Called Quest, Gang Starr and De La Soul started to turn to jazz,” remembers Deejay Smash, who then cunningly reversed the strategy: He remixed classic jazz records, adding hip-hop flavor.

Other deejays and musicians jumped onto the trend, and the scenes grew big, especially in New York and California. Bands like Jazzhole, the Solsonics and Jazz Not Jazz have become well known, and the new jazz sound is slowly getting fashionable. “We are still on the runway,” says Deejay Smash, “but the longer the runway, the better the takeoff.”

In San Francisco, the plane seems to be already flying. “Six months ago, we were exporting most of our records to Europe,” says Jody McFadin of dance-jazz label Ubiquity, founded last year. “Now we sell half of our products here.” And the city offers several club events every night-New York only a few per week.

It’s mostly imported acid jazz, however, that has broken into the charts. London’s not-so-brand-new Brand New Heavies, currently touring the States, are approaching the magic gold mark of 500,000 sales with their new album “Brother Sister,” despite not having produced any really new sounds in years.

Just a year ago, Jazzmatazz, a gathering of American hip-hoppers paired with jazz stars like Donald Byrd, Branford Marsalis and Courtney Pine attracted a big club audience in Europe and the States and sold more than 400,000 records.

And Us3, another British import, has just bombed the bank with more sophisticated tricks. “Cantaloop (Flip Fantasia),” an ingenious Herbie Hancock derivative, soared up to No. 8 on the Billboard charts and dragged sales of the group’s debut album “Hand on the Torch” to heights no acid jazz record had seen before, selling 700,000 copies.

The career of Us3 is a wunderkind story, a fairy tale from the realm of pop. It is full of pop-magic-the belief that you don’t have to be a genius if you have the right idea at the right time.

Geoff Wilkinson and Mel Simpson, heads of Us3, are producers, not musicians, calling themselves a project rather than a band. The two Londoners were pinching sounds from old jazz records in 1992 when they received a call from Blue Note records, whose classic work they had used without permission. With shaking legs they went to a meeting, fearing a lawsuit. Instead, they got a record deal.

And Blue Note, whose huge sound resources Us3 is now free to exploit, got “Cantaloop,” the most successful single it has ever released. The coup created a spin, just like a jazz loop. Suddenly curious young kids started to buy the originals, like Herbie Hancock and Art Blakey. And Blue Note cheers about the best sales they’ve had in years.

Other, smaller labels hope to gain their share of the action too. New York’s Instinct Records, probably the most active of the independents, cranks out compilations, mainly taking over records from partner companies in Germany, Britain and Japan.

The British, though, who claim intellectual property rights, are getting increasingly annoyed with American colleagues. “There are at least three firms calling themselves `Acid Jazz’,” complains Edward Piller, owner of the real Acid Jazz label. He sells records in 33 countries but cannot get a foothold in the U.S.

However, American acid jazzers still rely on the input of ideas from abroad. Bands sound like their European predecessors years ago. Many of them, like Swing Machine from New York, copy the same resilient groove and the abundance of live instruments but lack musical originality. Their work is often entertaining, rarely thrilling. In London, they would drag few people onto a dance floor.

On Swing Machine’s debut album “Deep Vibes,” the songs all sound suspiciously alike. It is mostly the same swing, the same beat that falls softly into the tiny holes guitars and horns leave open in an even soundscape. James Brown sneers behind the tracks.

The lack of experience and creativity compels record execs to dig hard for tomorrow’s talent. “America is three or four years behind,” complains Instinct owner Jared Hoffman.

But there are inspired bands too. There’s Jazzhole, elegantly capturing the spirit of urban, sophisticated hip-hop on their debut album “The Jazzhole.” There’s Solsonics’ rather traditional but sparkling effort with “Jazz in the Present Tense.” And there’s Us3, uniting British jazzers and Brooklyn rappers and capturing an arty but charmingly lively spirit that couldn’t be further from jazz or closer to pop.

To listen to Us3 is to sense the spirit of today’s acid jazz. It’s not virtuosity or interpretation, it’s the creation of something new. It’s-at best-a blend of precious old ingredients with a totally surprising taste.

Unfortunately, the acid jazz flavor never lasts. Like most sensual delights it doesn’t have the same effect twice; the recipe can be copied, but not the pleasure. The global laboratory is a postmodern roller coaster, where the creative process accelerates to an incredible speed. And today’s thrills are tomorrow’s bores.

For label boss Piller, acid jazz is still “like punk”: At the beginning, it exploited jazz and funk and moved onto other styles before the commercial trap snapped. “It took major record companies five years to catch up,” boasts Piller.

Gilles Peterson, deejay and head of London’s Talkin’ Loud label, calls the term acid jazz “outdated”-the old jazz-funk-tag sticks to it too relentlessly. “The avant-garde of today is very abstract and chaotic, heavily influenced by hip-hop, punk and techno,” he says.

There are many routes from the home of jazz to other continents of the musical globe. Some bands, like British Galliano, have moved on to rock, others to reggae and even Brazilian samba. Others have dumped all live musicians and play around only with records and samplers. London’s Mo Wax label releases some of the best works-fragile jazz tunes, spliced with irritating techno-samples.

From there, it is a long journey back to Chicago’s Liquid Soul. A few hours after midnight, the band on the Elbo Room’s basement stage sounds more and more like a traditional jazz band, giving each musician space to succumb to long improvisations. The dance floor fills only when the band stops for a break and the deejay keeps on going.

Neither weird nor shockingly avant-garde, Liquid Soul is having a hard time in Chicago. The group has no record deal and only a small fan base. And it took the group three years of playing in different clubs to find a permanent home.

“Chicago is a conservative town,” sighs Liquid Soul’s deejay-affiliate Jesse de la Pena. “The clubs and radio stations don’t play our kind of music. And people, used to house music, think acid jazz is techno sound with horn samples.”

As hip London acid jazz evolves into horn sound with techno samples, Chicagoans may finally feel at home.

THE MUST-HEAR ACID JAZZ PACKAGE

Essential acid jazz releases on disc:

– Galliano, “In Pursuit of the 13th Note” (Talkin’ Loud/Import): Three years old and still vibrating-a classic.

– Us3, “Hand on the Torch” (Blue Note/Capitol): Amazingly easygoing sampling artistry from British-American joint venture Us3. Jazz as pop music.

– Various artists, “This Is Acid Jazz” (Instinct): A new compilation of mainly European bands, from mellow to innovative.

– The Jazzhole, “The Jazzhole” (Bluemoon): Great minimalistic jazz-rap, often experimental, always cool.

– Various artists, “Mo’ Wax Compilation” (Mo’ Wax Records): The latest hype from London’s big acid jazz deejay scene, pure sound-recycling but full of life.

– United Future Organization, “United Future Organization” (Talkin’ Loud/Verve): Sounds like Galliano but is Japanese. Great Jack Kerouac raps from the grave, proving that this is the real sound of the beatniks.

– Various artists, “Straight No Chaser” (Blue Note): The most popular jazz tunes, made mincemeat by acid jazzers. Listen to Herbie Hancock’s “Cantaloupe Island,” remodeled by Us3, and discover the secrets of acid jazz.