The lead singer-guitarist utters those words like a child, his voice so high it could touch the stars. He performs for a packed house, a few hundred early-morning revelers who've seen Saturday turn into Sunday and still haven't had enough free beer and glad-handing over the course of four days. They want more, more, more, so they pack into the Naked Grape--a rather average club in downtown Austin, its bar bigger than its stage even here in the so-called Live Music Capital of the World. They show up even though it's 2:30 a.m. and the city's slowly shutting down, arriving just in time for the performance by this young band so happy to be playing rock and roll's annual four-day insurance convention, South by Southwest--where dreams come true, like the man said, but only for a lucky few.

The man standing on stage is none other than Old 97's frontman Rhett Miller, who was, a very long time ago, a kid struggling to make a living making music. He was once like most of the 800 bands that come to Austin every year to peddle their wares on stages and street corners--desperate, anonymous. Only after he started singing his pop with a twang did Miller's dreams come true: Last year, Elektra Records released the Old 97's' major-label debut, Too Far to Care, and though it was greeted by the world with a shrug, selling only 16,000 copies since its release, the 97's have still been invited to perform on this night for Spin magazine's invite-only closing-night fete, where it's free beer and cigars and rock for everyone.

And here's where the dream becomes reality--tangible, concrete. A handful of songs into their set, Miller welcomes to the stage a man who paid his dues long before labels started picking up the check. The band's special guest--X's John Doe--was defining and destroying rock and roll while Miller was still wearing St. Mark's gray-and-whites.

Doe steps onto the Naked Grape stage wearing a blue-and-white plaid shirt, a crooked grin, and two decades of history, and suddenly, Rhett Miller shrinks about two feet. It's not Miller's fault; Doe is a presence, and Miller is only a performer--the difference being, what Miller communicates with an eyes-wide-shut holler, Doe gets across with a groan. Doe performs three songs with the Old 97's, and it's indeed a rare SXSW highlight: The 97's are like a socket full of juice, and Doe's a 1,000-watt bulb illuminating the room, the grin never leaving his face. The crowd, filled with cynical expense-account insiders who'd rather buy a drink than a record, is thrilled, hypnotized, born again hopeful. Rock and roll can do that to you sometimes, even when played by guys who don't have to worry about covering this month's rent.

But for every dream come true, there are hundreds of others that fail to materialize; just ask the Pushbacks or Buck Diaz or Pearly Gates or the New Rob Robbies or hundreds of other bands who came to Austin without a deal and left without any gas money. Once upon a time, 12 years ago to be exact, South by Southwest was an intimate music conference created by the Austin Chronicle with the intention of exposing regional bands to national tastemakers; back then, the biggest star in town during the conference was Mojo Nixon, who used to show up all over Austin bumming rides. Even as late as 1991, the largest crowds were found at Poi Dog Pondering and Bad Mutha Goose. Talk about the bad old days.

Now, SXSW is built around major-label attractions, the bands who don't need deals: This year alone, Soul Asylum, Sonic Youth, Robyn Hitchcock, Billy Bragg, Joe Ely, Imani Coppola, Propellerheads, Vic Chesnutt, the Old 97's, and dozens of other major-label artists filled the schedule of performers scattered around Austin's clubs. They came to preview new material for the hundreds of journalists who can provide thousands of column inches of free publicity; they came to do interviews; they came for the credibility. You knew the jig was up this year when Kathy Mattea, the '90s Anne Murray and the antithesis of the SXSW performer, opened for the always wonderful Robyn Hitchcock on Thursday night and offered this assessment: "I was looking at the schedule, and I noticed I'm playing the same schedule as Sluts for Hire." Someone pointed out she was also playing with Nashville Pussy, but it seemed a little obvious.

Sonic Youth kicked off SXSW's official opening night (Thursday) by debuting, er, songs from their forthcoming Geffen album A Thousand Leaves. Only at SXSW would there be a line wrapped around a club to see these New Yawk noise-rockers: Thousands of badge-wearing industry types and wristband-wearing locals packed themselves into La Zona Rosa for a punishing, joyless set of feedback and furor. "I'll bet most of the people in here never even paid for a Sonic Youth record," said one audience member, looking away from the stage to avoid the blinding green light shining in the crowd's eyes. If Sonic Youth were a band of 22-year-olds from Denton instead of 40-plus-year-olds from Manhattan, there would have been eight people in the crowd who would have booed the band off the stage and beat them to death with their out-of-tune instruments. Hell, after Sonic Youth, Mattea's set of NashVegas pop seemed almost comforting: Despite what you might have heard, chord changes are a good thing.