Toward the harrowing end of THE BLAIR WITCH PROJECT, Heather Donahue, the leading lady of the film, makes a tearful apology directly into the lens of a video camera. In what is already the most recognizable shot from the film, her eyes well. Her lips quiver. Her nose runs. It’s horrifying and it’s real. “That was my own [snot],” the actress says with a smile, during a recent press junket in LA. “I’ve never done stunt snot in my life. I’m anti-glycerin.”

Dressed in a smart summer outfit and downright giddy, Donahue is quite the opposite of the frantic, frightened woman we see in the film. In case you’ve been lost in the woods, THE BLAIR WITCH PROJECT is the little, all improvised, no star, no CGI, no gore horror film that has scared much of America and all of the big studios. Shot on video and 16mm for about the price of a new US auto, it’s now headed toward the Holy Grail of film: the 100 million dollar box office take.

Once a mere Sundance indie fave, BLAIR WITCH is now a powerhouse presence that’s even frightened big studio films into moving their opening dates. “I think that is the funniest darned thing ever,” Donahue says, practically slapping her thigh for emphasis. “I hope studios think, ‘hmm, no name actors, improvisation, let’s do more of that.’ That would be fabulous. I would love that. This is the little movie that could and people like that. It’s an underdog story. We are nothing if not underdogs for god's sake [laughs].”

Pausing in mid-sentence to rub up against the back of her chair, (“Tags! That’s the problem with borrowing clothes!”), Donahue seems tickled pink with the film’s success, even though they use the up-the-nose shot of her on the poster too. “Someone actually asked me in an interview why I didn’t wipe my nose,” she says incredulously. “What, shooting, improvising and acting in a scene wasn’t enough for you? [laughs] That would have been quite attractive if I’d have wiped it on my sleeve.”

By now the way BLAIR WITCH was conjured up is legend, and the thought of budding filmmakers imitating co-directors Dan Myrick and Ed Sanchez is almost as frightening as the film itself. Something of a pressure cooker approach to film, the three first time film actors were dropped in the middle of the Maryland woods for eight days with two cameras, a minimum of supplies and just the bare bones of a script. Donahue looks back on the experience as a treat. “They would give us a global positioning system and we would just go to the way points,” Donahue explains for the umpteenth time. “We always knew they were going to do something, we just never knew what exactly to expect.”

Several months earlier the young thesp, who’d been acting since age three, had been doing three things: “temping, temping and more temping.” Then she saw a particular ad in the trade publication Back Stage. “With most films [that advertise for actors in Back Stage] it’s like ‘Will give you meals and a copy of the film.’ [BLAIR WITCH] was definitely an attention getting ad. ‘A totally improvised feature, wooded location, intense shoot.’ It sounded insane, so I had to go check it out.” Over 2000 actors were paraded before the frosh directing duo in New York, Los Angeles and Orlando, Florida (where Sanchez and Myrick had both gone to film school).

“I went back five times in a period of three months,” Donahue relates. “The same four scenes. Basically their script was without dialogue, they had a structure, playable actions, and we improvised.” Donahue’s persistence paid off and a call came from producer Gregg Hale. She thinks back and laughs hard. “My mom wanted to know everything. Where did they live? Who were their parents? Where did they grow up? Where did they go to school? She wanted to see a tape. I mean, would you ever send your daughter to the woods with two actor guys she’d never met before and 10 guys watching from a tent a 100 yards away with a video camera? It doesn’t sound very good. And when Gregg the producer called to cast me I said, ‘Is this a snuff film?’ And he said, ‘If this was a snuff film don’t you think we’d have a better cover?’"

Several weeks later, Donahue found herself literally lost in the woods with her two co-stars, Josh Leonard and Michael Williams (everyone used their real names to heighten the realism and documentary feeling). For eight days the trio hit their “plot points” and developed their characters through intense improv. She seems very matter of fact about it today as the freedom set the trio freer than anything else they'd ever done.

“You get to go places you’d never normally get to go,” Donahue says wistfully. “You have a character, but you don’t have somebody else’s words. You get to be creative instead of just interpretive, which is a beautiful and rare thing to get as an actor. I think it’s a shame that I most likely will never get to do that again. I think if people opened up that avenue a little bit more to actors you’d see more dangerous and more interesting things happening. But everything has to go through so many people. There were lots of times when we took things in directions that were not in our notes. As long as we always hit the notes we felt pretty free to try another scene.”

Then could one assume that Donahue, who played the leader of the three, felt right at home in the woods? “Dear god no,” she laughs. “I was an urban girl who camped in hotels every summer with my family. It was a totally new experience for me.” And the facilities in the wild? “A shovel and a little bag and that was it. [That’s] sweet for girls.”

The three got so deep into character they even set up their own shorthand communications system. “There was a line we had to draw for ourselves and whenever you’re playing a character, there’s sort of two people working, the actor and the character, and that varies depending on what the role is. Here we definitely had boundaries for ourselves. We had a code word “taco” that we would use to break the scenario and talk to each other as actors and see how we were doing, how we feel.” Donahue grins. “But then we realized when we got very hungry that taco was a bad choice for a code word.”

Lousy conditions. Minimal food. And directors who wake you up in the middle of the night banging on your tent and making scary noises. Like every main player (except Tom Hanks) during the boot camp pre-production training on SAVING PRIVATE RYAN, was the trio ever tempted to pack it in and give up? “We knew what we were getting ourselves into,” Donahue says clearly. “And we were pretty darned excited about it. We went to lots of call backs to make sure we could get to go.”

As the frightened three encountered bloody teeth, lost maps and forbidding looking stick-men effigies, the acting bond between them grew stronger. If things got too intense or too confusing, ‘taco’ would soon ring out in the forest, as Donahue explains. “We’d go ‘We're Heather, Mike and Josh now, the actors, talking to each other and making sure.’ Just so we were always clear on when the camera's on and when it’s not on.”

In the story, as things go from bad to worse, any chance for romance between them grows dimmer than their lanterns. “I think there might have been an early intention of something like that,” she says of possible tryst equations and then adds with a snort, “But that was NOT going to happen. After about day five when you’re skanky as all hell, to be perfectly honest, that’s the last thing on your mind.”

As the film winds down and climaxes in an abandoned house, Donahue found herself experiencing some moments of actual terror and eventual relief. “There was also the tension of knowing that it was almost over, she says now. “So you have that feeling like when you really have to pee and you’re right by your door and that’s when you can’t hold it anymore. That kind of sensation.”

From the trio’s eight tremulous days over 20 hours of footage was shot. Sanchez and Myrick worked some magic and cut it down to under two. When Donahue and co-star Williams saw the finished film they figured they had something special and had a good chance of going to Sundance. They were right. It did and it was a smash. But no one dreamed the film would be the hit it has become, the PHANTOM MENACE of independent film. Now with everyone getting on board, even Mr. Donahue has got into the mix. “My dad’s on the internet sending letters to all the people who give us bad reviews,” Donahue says with both pride and embarrassment. “He’s my one man defense force. He’s amazing.”

Heather the character and Heather the actress both get right to the point on camera and in interview. Heather’s on screen bluntness has caused much debate on the many internet chat rooms who dissect the film’s every character motivation and ponder: Is Heather assertive and modern or a manipulative bitch? “My character is a headstrong sassy independent filmmaker,” she says with a huge grin.

And of the future? Donahue shrugs. “I was never really in the industry. So I’m new to the industry even though I’ve been an actor for a really long time. I’m doing an independent film called UNDER THE HAMMOCK whenever it gets together and I’m looking to read scripts that aren’t horror movies (laughs). Who knew they made so many?”

Trust us. They’ll be making plenty more.