As William R. Reagan tells its the inspiration came to him about six years ago, over a 3 a.m. snack of milk and cookies. For some reason, he was thinking about car theft, and he hit on the idea of a small homing device that could be hidden in cars and tracked if the vehicle was stolen. He proceeded to develop such a system called Lo-Jack. Now he is being bombarded with suggestions for all kinds of other products using the same technology.

Most of the suggestions have come as a result of the publicity that his company, Lo-Jack Corp. of Boston, received when it went public last April to finance the introduction of the Lo-Jack system. Soon afterward, calls started to pour in from around the world. The callers proposed putting the tiny transmitters in airplanes to pursue hijackers; stowing them in ships to trap smugglers and drug dealers; even implanting a miniaturized version in the bodies of diplomats so they could be traced if they were kidnapped.

The system actually consists of three separate devices. One, the $350 Micromaster, is about the size of a pack of cigarettes and can be installed in the electrical system of a car or truck. Then there is the Sector Activation System, a component that law enforcement agencies will use to activate the Micromaster when a car is reported stolen. Finally, there is the Police Recovery Instrument -- a $1,000 receiver installed in police cruisers -- which will allow police to find the stolen vehicle after activating the Micromaster.

Reagan plans to test-market the system in his home state of Massachusetts, which just happens to be the car-theft capital of the United States. If all goes well, he will then offer it to the rest of the country. His dream is that his invention will eventually annihilate the auto-theft industry, which is reportly responsible for an annual nationwide loss of nearly $4 billion.

In the meantime, he is keeping a close watch on his own car, which is wired with all kinds of commercial antitheft devices. "It would be very embarrassing if my car were stolen before Lo-Jack hit the market," he says.