A newfangled tool Grandma never had in her quilting kit

What has the computer to do with that most traditional of American crafts - quiltmaking? Our grandmothers might wince at such a notion, but craft-artist Debra Millard of Englewood, Colo., has developed the designs of many of her quilts by exploring patterns with a computerized art program.

Modules are rotated in different sequences on the computer, she explains, to produce pattern variations. Small portions of a computer printout are then chosen as the basis for a quilt.

It all started in the late 1970s, when she was working for her master's degree in design at the University of Minnesota. She chose ''the quilt as an art form'' as her project for exhibition. Most of her quilts, with their irregular outside shapes, are made to hang on a wall and be enjoyed as art.

''I spent many nights drawing patterns off by hand and not being quite satisfied,'' she says. ''Then one day I brought all my patterns to class and a friend said, 'You could do all that on a computer in a few seconds.' So I found out how to use a university computer and began to make the many printouts which I am still using to help me draw my patterns.''

It was at the university that she also developed her own systems for hand dyeing her fabric. These days she dyes fabric in her kitchen at home - a considerable process, since to get the kind of muted color interactions she wants, many of her quilts use between 30 and 50 colors. Her favorite palette involves grays, mauves, blues, and browns.

Mrs. Millard has a separate room for all cutting, piecing, and quilting. She uses neither frame nor hoop, but quilts by hand by simply holding the piece in her lap. She does piece the squares together on her sewing machine. Her quilts range in size from 24-inch squares up to pieces that are 90 to 100 inches long. They range in price from $700 to $2,400, depending on the complexity of pattern, size, and range of color gradations. Most are not meant to be used as bed quilts.

Although she is married to a tax lawyer and has a seven-year-old daughter, she has always found time for her craft. Her letterhead reads ''Debra Millard, Quilt Art-Computer Art.'' She started small but has made headway each year.

Since 1979 her work has been shown in local and national quilt shows, in craft galleries, and at American Craft Council craft fairs such as the forthcoming Craft Fair at Baltimore, Feb. 17, 18, and 19.

She will also exhibit at the Washington Crafts Show at the Smithsonian Institution, April 26-29. And the Foothills Art Center, Golden, Colo., will sponsor a one-person show of her work this spring from April 29-May 27.

Mrs. Millard also teaches and lectures on fabric dyeing and quilt designing.

Her quilts are now included in many corporate and private collections, banks, and museums. She enjoys those commissions that enable her to create for specific environments. Vladimir Kagan Designs, a Manhattan decorative showroom, introduced her geometric ''computer quilts'' to New Yorkers last November and will continue to represent her.