Actually, there are some extraneous "" in the prior post. Here's a corrected
version:
<dtml-in valid_prj>
<dtml-call "REQUEST.set('val_prj_seq_item', _['sequence-item'][0])">
<OPTION value="&dtml-val_prj_seq_item;"><dtml-var
val_prj_seq_item></OPTION>
</dtml-in>
I also should have mentioned that this approach allows use of the &dtml-x;
"entity syntax", within tags..