Duane Davis -- AKA, Keefe D -- was in court out in Vegas Tuesday for a hearing on his potential release on bail pending his criminal trial ... where his legal team was arguing before a judge that their client wasn't a danger to society, nor was he a flight risk if they'd agree to cut him loose from lockup until the trial.

Mind you, Keefe's been in the Clark County jail since late September -- when he was first indicted for the murder of Tupac and taken into custody by cops ... the first big break in the cold case for a long, long time.

Remember ... Keefe's been out there publicly claiming to have been in the car that night way back in 1996, when Tupac was shot and killed while riding passenger with Suge Knight.

Keefe has suggested he wasn't the trigger man himself, but he's also the only one left alive to prosecute over the long-unsolved crime -- and Vegas officials finally brought him in.

Keefe's legal team pointed out that the proof was in the pudding in terms of Keefe not being a risk -- openly asking the court, if he was so dangerous, why did it take so long for cops to haul him in, even though his affiliation with the Tupac murder was well-known for a while.

They also doubled down on his not guilty plea -- saying he only said all that stuff about Pac's murder for entertainment/monetary gain ... but prosecutors pushed back, arguing this guy was a cold-blooded killer and absolutely should not be out on the streets.

In the end, the judge agreed to let him out pending trial ... but set his bail pretty high at $750,000. He also said even if Keefe could cough up the dough, he'll be confined to house arrest with electronic monitoring while he waits for his trial.