DURING THE RIOT, 14 GUARDS WERE HELD HOSTAGE AND HUNDREDS OF PRISONERS ROAMED THE PRISON SMASHING AND BURNING EVERYTHING THEY ENCOUNTERED. AT LEAST 7 HOSTAGES WERE SEVERELY BEATEN, SEVERAL WERE REPEATEDLY RAPED, AND 33 INMATES WERE KILLED. AS MANY AS 200 OTHER INMATES WERE BEATEN AND RAPED. THE MAJORITY OF THE 1,136 INMATES FLED AND SOUGHT SAFETY AMONG THE STATE POLICE AND NATIONAL GUARDSMEN SURROUNDING THE PENITENTIARY. ALTHOUGH SUCH INMATE-TO-INMATE VIOLENCE WAS UNPRECEDENTED, THE BASIC CAUSES OF UNREST AND FRUSTRATION WERE SIMMERING FOR MORE THAN 5 YEARS. THE PENITENTIARY WAS DANGEROUSLY OVERCROWED AND UNDERSTAFFED. MAXIMUM-CUSTODY INMATES WERE MIXED TOGETHER WITH YOUNG AND VULNERABLE FIRST OFFENDERS, OFTEN IN DORMITORIES HOLDING AS MANY AS 90 MEN EACH. IN THE WAKE OF THE RIOT, THE GOVERNOR OF NEW MEXICO PUT TOGETHER A LEGISLATIVE PACKAGE APPROPRIATING $82 MILLION FOR THE CORRECTIONS SYSTEM. THE LEGISLATION INCREASED THE GUARD FORCE AT PNM, RAISED CORRECTION OFFICERS' BASE PAY, AND ALLOCATED $44 MILLION FOR A NEW SUPER-MAXIMUM SECURITY PRISON. GRAPHIC DESCRIPTIONS OF RIOT CONDITIONS AND PHOTOGRAPHS ARE INCLUDED. (PRG)