Modern dance pioneer Alwin Nikolais is accustomed to worldwide acclaim, but he confesses he was terrified by the squirming second-graders who attended the world premiere of his new ``space fantasy'' for children. ``Children frighten me,'' said Nikolais, a 79-year-old bachelor. ``You never can know what their reaction might be, unless you're around them a lot. I'm not around children very much, so it was doubly terrifying.'' Nikolais needn't have worried. Moments after the curtain rose Tuesday on ``The Crystal and the Sphere,'' his stage voyage through the galaxy of a child's imagination, Nikolais clearly had won the hearts of 500 local school children who packed the Kennedy Center's Terrace Theater. The kids squealed as the house lights dimmed and the rumble of thunder shook their seats. They oohed and aahed as the rising curtain revealed a 20-foot balloon rocking gently on the stage, like a strange new planet, and a 12-foot shard of crystal bathed in celestial lights. They giggled at the wondrous aliens that cavorted across the stage _ a mermaid who teasingly tied her kelp tresses to an angler's hook, a pair of fat, web-footed birds that splashed in musical mud puddles, herky-jerky androids ablaze in ultraviolet hues who disappeared in the twinkling of an eye. Nikolais did it all _ choreography, synthesizer musical score, scenery and costumes _ in creating the $20,000 centerpiece for this year's ``Imagination Celebration,'' the Kennedy Center's annual arts festival for children. His new work, performed by five hand-picked dancers from New York, is being presented nine times this week at the Kennedy Center before it travels to children's festivals at the El Centro Theater in Dallas, April 18-20, and the Orange County Performing Arts Center in Costa Mesa, Calif., April 25-26. ``The first show is a terror,'' said Nikolais, sighing happily after the curtain fell on his latest premiere. He hadn't created a dance work for youngsters since he was director of the Henry Street Playhouse in New York in the late 1940s, when his company staged a dozen popular ``dance plays'' for children. Since then, he has been cheered by audiences and critics around the world _ and received the coveted National Medal of Arts from President Reagan in 1987 _ as a modern dance visionary. In a way, Nikolais said, his work on ``The Crystal and the Sphere'' meant returning to the world of children after a 40-year absence. ``They haven't changed,'' he said. ``They're made the same way and they behave the same way. It's that I'm rediscovering them again.'' Nikolais tried to envision the unearthly creatures a child might encounter on an imaginary exploration of the planets. ``Like most artists, I have a childlike mind with a certain innocence that allows me to do things that others don't dare to do,'' he said. ``I do know that children love color, and they like motions that they don't see all the time. I thought they'd like these curious, angular body shapes, and dancers who suddenly appeared and disappeared. ``Children also like strange sounds. You don't hear them humming Beethoven's Fifth Symphony. They like the big bang, like the world's coming to an end. And what really scares them is the lights going out, and being left in the dark. That always makes them yelp.'' Nikolais' vision scored a hit with at least one member of the audience Tuesday. When the lights went up after the 45-minute show, a little girl turned to a schoolmate and asked, ``It's over already?''