Place half of chopped pepper and 3/4 cup vinegar in container of an electric blender; process until blended. Repeat procedure with remaining chopped peppers and vinegar.
Place pepper mixture in a flat bottomed kettle; bring to a boil. Reduce heat; cover and simmer until peppers are tender. Drain. Reserve juice; discard pulp.
Combine reserved juice, sugar, red pepper, and salt in kettle. Bring to a rolling boil. Add liquid pectin, and return to a boil. Boil 1 minute, stirring constantly. Remove from heat, and skim off foam with a metal spoon. Stir in food coloring, 1 drop at a time, to reach desired color.
Quickly ladle jelly into hot sterilized jars, leaving 1/4-inch headspace. Cover with metal lids, and screw bands tight. Process jelly in boiling-water bath 5 minutes.