DENVER - The Nuggets have been billing themselves as a team without a bona fide star.

That assertion is getting harder and harder to make, especially given the way 23-year-old Danilo Gallinari has been playing this season.

Denver signed the smooth-shooting Gallinari to a four-year extension on Wednesday, worth US$42 million.

The deal, first reported by the Denver Post and CBSSports, represents a big step for the Nuggets and their versatile Italian forward, who came over from the New York Knicks in the Carmelo Anthony trade last February.

The Nuggets have moved on from 'Melo. Now, it's Gallo's time.

Gallinari is averaging career bests in points (17.4), assists (2.8) and steals (1.7) this season. He outplayed Anthony in the first meeting since they were swapped in the blockbuster trade, scoring a career-high 37 points as the Nuggets outlasted the Knicks 119-114 in double overtime on Saturday night at Madison Square Garden.

"Gallo has been excellent and done everything we have asked since we made the trade," said Masai Ujiri, the executive vice-president of basketball operations for the Nuggets. "Everybody is seeing how talented he is, and he's only 23 years old. He is only going to get better."

Later in the day, the team signed centre Kosta Koufos to a multi-year contract extension as well. Koufos is averaging 3.5 points and 3.6 rebounds.

The Nuggets (12-5) own a better record than every team in the Western Conference except Oklahoma City (14-3). Even more, they are 30-12 since reshaping their roster with the Anthony trade. This is a team that relies on a deep rotation, and fields a lineup that lacks a household name.

Still, some of their players are beginning to attract notice. Gallinari and point guard Ty Lawson are garnering All-Star consideration for their play.

And rightfully so, coach George Karl insisted.

"What I think in my mind is that Gallo and Ty Lawson have moved into top-10 status at their positions," Karl said before his team's game in Sacramento on Wednesday night. "We would like to get them both into the top-five one day.

"With Gallo, he is one of the more skilled and talented guys we've coached. We really need him to be a leader in a lot of ways. Not only scoring but a leader in the locker room and on the court."

Whatever it takes, especially now that he's locked in.

"I am first concerned with helping my team win (games)," Gallinari said. "But right now, I don't think I am playing at the level of a superstar yet. There is still a lot of work to do."

The Nuggets have been opening up their wallets quite a bit lately, signing centre Nene to a five-year, $67 million contract just before the season began and then team leader Arron Afflalo to a five-year deal worth up to $43 million.

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AP Sports Writer Arnie Stapleton in Denver and freelance writer Antonio R. Harvey in Sacramento contributed.