hi Ygor,
Thanks for the assistance.
I am able to use the local variable approach (j=$1...) but not the array approach. The arracy approach is taking the entire string 'awk -f t1.awk abc.flag' as an argument and not the output of awk awk -f t1.awk abc.flag
My t1.awk now looks like:

BEGIN{FS = "|"; RS = "\n"}
NR==1{j=$1;k=$2}
NR==2{print j, k, $1, $2, $3}

then $ awk -f t1.awk abc.flag
gives me:
a b 1 2 3
on the console.
How can I capture this console output so that I can use them in a shell script to insert into a oracle table?

I guess I cannot do database activities (insert/select) within a AWK script.

My Insert shell script is:
sqlplus $USERNAME/$PASSWD@clbd << END
insert into nr_test (COL1, COL2, COL3, COL4, COL5 ) VALUES ('$var1', '$var2', $var3, $var4, '$var5);
EXIT;
END

so typically i need the data in the awk variables j,k,$1, $2, $3 to be acceptted into $var1', '$var2', $var3, $var4, '$var5

Please advice.