RALEIGH, N.C.--Porky, the World's Largest Pig, and Muffin, the World's Smallest Horse, had been drawing huge crowds all day at the annual North Carolina State Fair.

But on a recent Saturday evening, the lines disappeared, the freak-show hosts fell silent, and the roller-coasters seemed almost to stop.

North Carolinians young and old began to focus their attention on radios and portable television sets, and the latest round in a bitter Senate race.

"The Love Boat is ain't," says one elderly farmer, spitting tobacco juice at a nearby fence. "Jim and Jesse's at it again. Hot damn."

Jim and Jesse--better known to outsiders as Republican U.S. Sen. Jesse A. Helms and Democratic Gov. James 8, Hunt, Jr.--were preparing to mix it up on statewide television in the fourth and final debate of their bitter Senate race. And true to the last 18 months of campaigning, both men let it fly.

At stake in this election--the candidates repeat ad nauseum--is the future of North Carolina. Hunt, seen by many as the embodiment of the New South, argues for progress and high technology. Helms, widely considered the standard-bearer of the Old South, wages a moral crusade in defense of traditional American values.

More than that, North Carolina's Senate battle--the most expensive and vituperative in U.S. history--is widely seen as a national race, a referendum on both the Reagan presidency and the New Right.

With polls showing President Reagan far ahead of Walter F. Mondale by almost 2-to-1 margin--25 to 30 percentage points--in North Carolina, Helms has bet the bank, on a strategy of sewing himself on the President's coattails.

On the road and over the airwaves, Helms cozies up to the White House, boasting that "Ronald Reagan is my longtime friend."

That friendship is valuable not only to me; it's valuable to North Carolina," the senator says. In a veritable campaign coup, Helms, in August, persuaded Reagan to tape a 30-second television commercial in which the President solemnly proclaims: "One senator we can always count on to stand up for his beliefs is Jesse Helms. Jesse's courage on the tough issues is an inspiration for all Americans."

"I cherish my friendship with Jesse, and I need his honesty and his outspoken patriotism back in the United States Senate. Next year, more than ever, I'm going to need the advice and the experience of Jesse Helms to keep America moving," the President says.

Hunt is quick to challenge the Helms-Reagan association, pointing out that Helms has often opposed the President on many of the administration's most centrist policies.

"People realize that Sen. Helms is different from President Reagan," Hunt told reporters recently. "People know the difference, and they're just not going to buy that business of him being so close to Reagan ... they're going to distinguish in this race."

Meanwhile, the governor has distanced himself from the national Democratic ticket. Celebrities, not politicians, join him on the trail. Television stars Hal Linden and Bonnie Franklin, singers James Taylor and Peter, Paul and Mary, and hairdresser Vidal Sassoon have appeared on the governor's behalf While both members of the Democratic presidential ticket have flown in for brief rallies and a handful of southern governors have held news conferences boosting Hunt, only Sen. Gary W. Hart (D-Colo) has appeared recently on the governor's behalf.

With the race's national implications in mind, both candidates are trying desperately in these last days of the campaign to break out of a virtual dead heat.