Here's the recipe best as I can remember (I have a tradition of making new sauces drunk and modifying the flavors sober the next day).

Place dried peppers in small sauce pan with 1 cup water. Saut‚ on low until water had reduced to about 1/4 cup. Remove peppers and place on baking sheet in 250F oven until completely dried. Grind in spice mill and add 1 Tsp. back to pepper reduction along with all other ingredients and remaining 1 cup water. Simmer on low for 20 min (or until the "bite" from the vinegar is gone). Add salt and black pepper to taste. Refrigerate overnight and correct flavors.

From: Brian Geyer
Posted By: Brian Geyer, BBQ List
Post Date: Nov. 1998