An argument over clothes that had been dropped on the floor of an East Baltimore laundry yesterday led to the fatal shooting of a 25-year-old man, city police reported.

The victim was identified as William Jones of the 500 block of N. Dallas St. Hit by three bullets, he was found dead on the street outside the laundry, police said.

Agent Arlene K. Jenkins, a police spokeswoman, said the incident began just after 9 a.m. at a laundry in the 1500 block of N. Broadway.

A woman complained that a laundry employee dropped some of her clothes on the floor while transferring them from a defective machine.

The woman left the building and returned moments later with her boyfriend, Mr. Jones, who continued to argue with the laundry attendant, Agent Jenkins said.

Police said Mr. Jones was carrying a handgun and as the argument intensified, the employee pulled a .25-caliber handgun and started shooting at him.

Five shots were fired and three of them struck the victim, who staggered to the sidewalk where he collapsed and died, Agent Jenkins said.

Police said there was no indication that Mr. Jones returned the fire.

The handgun he reportedly carried disappeared before officers arrived at the scene, police said.

The employee and Mr. Jones' girlfriend were being questioned by homicide detectives last night at police headquarters.