On the Outside . . . but in Good Company : Pop music: Holly Cole, who sings Sunday at the Coach House, is tough to categorize, but so are the artists she admires.

Singing the lowlife lyrics of Tom Waits is a natural for Holly Cole. The 31-year-old Canadian’s two previous U.S. releases, collections of jazz standards and pop tunes, were hailed for their sultry / boozy quality and her sexy readings. Hers is a voice that any barfly would love to hear addressing him when lights are low and last call is announced.

Cole, who sings Sunday at the Coach House, says her collection of Waits’ tunes, “Temptation” on Metro Blue / Capitol Records, is a logical extension of what she’s done thus far, meshing neatly with her jones for songs that tell a story.

On the phone this week from Toronto, she talked about the difficulty separating Waits’ lyrics from the well-known Waits image. “I sat down in a pile of his records for about two months and immersed myself in his writing,” she said. “His character is so clearly defined that it’s hard to take the music outside of it. I didn’t want his persona, just the songs, the tools that define it.

“Lyrics have always been very important to me, and [Waits] is such a compelling songwriter. His writing is so strong, his characters and stories so interesting. His people are down on their luck, but they never seem pathetic. They have integrity. In that sense, his stories are very uplifting. He’s a poet trapped in a musician’s body.”

Still, Cole says, Waits is better known for his rough-hewn identity than for his music. “If you ask the average person about Tom Waits, they’ll say ‘yeah, he’s great.’ They’ve seen him in the movies.”

This strong identification with the man presented problems. “The hardest part [was] to divorce myself from his persona, his identity, because of how well he’s defined himself. And there was also the gender issue. He’s a very strong male figure, not macho, but very male. That was one of the more interesting challenges.”

Cole says she was helped by one thing she shares with Waits: Both have reputations as outsiders. “Ever since I was a little kid, I felt like an outsider, not necessarily in a bad way, but it was something I wrestled with a lot when I was younger. I was a real tomboy.

“I was really rebellious. I always felt like I was living in a different time period. When it was the ‘70s, I felt like I was in the ‘60s. And in the ‘80s, I wanted to be in the ‘40s. Those feelings continue, but I’m comfortable with them now.

“So I share that with him. His music is a hybrid of styles like mine. The people I admire don’t fit into any one category, like Tom, like k.d. lang, like Lyle Lovett.”

*

Because of this lack of easy categorization, some of Cole’s albums have fallen between the cracks with critics and marketing people as well. “Jazz writers think of me as a pop singer. In the pop world, they think of me as a jazz singer. That makes it hard at times. The machine can’t work for you efficiently if they can’t place you in a specific radio or retail market.”

Cole studied classical piano as a child. “My parents wanted me to become a classical player, but I said no way. Anything I was supposed to do, I wasn’t going to do.”

She was something of a Deadhead in her early teens, but a visit to her brother at the Berklee College of Music in Boston changed her direction when she was 16. “He played some Eric Dolphy, and my jaw dropped. It was ‘Live at the Five Spot,’ and I couldn’t believe what I was hearing. I went out and bought an alto and started learning to play.

Jazz “had all the sophistication, complex harmony and that warm acoustic sound of classical music, the personal intimacy that classical music had. But classical . . . seemed stiff, and it was something I was supposed to do.

“And jazz also had that really bad side. People who played it were bad; it was played in seedy clubs with drinking and smoking going on. It seems to have lost some of that today. Now it seems like the cleanest thing.”

Cole soon gave up on the saxophone, but singing--something she’s always done--took its place. Her first release, “Girl Talk,” on the Canadian label Alert, went gold despite its blend of standards and contemporary numbers. In 1992 Capitol Records released “Blame It on My Youth,” which included such jazz chestnuts as “If I Were a Bell” and “I’ll Be Seeing You” as well as Waits’ unrecorded “Purple Ave.”

She continues to work with the musicians who recorded “Girl Talk,” pianist Aaron Davis and bassist David Piltch. For her current tour, she has added guitarist Kevin Breit and former Lounge Lizard drummer Dougie Bowne.

“I love going out on the road,” she said, adding that she and Davis and Piltch “grew up together on the road. That’s all we did for four years before making ‘Girl Talk.’ Most performers make recordings, then go out on tour to support the record. I make records so I can keep touring.”

When she’s not on the road? Life resembles a Waits song. “I play pool, have a few drinks. I’m always searching for the quintessential heart of Saturday night.”

* Holly Cole sings Sunday at the Coach House, 33157 Camino Capistrano, San Juan Capistrano . 8 p.m. $13.50 . (714) 496-8927.