Bring chile peppers and 4 cups water to a boil in a medium saucepan; boil 15 minutes. Drain chile peppers, discarding liquid, and let cool 10 minutes. Remove and discard stems and, if desired, seeds. Chop peppers.
Pulse chile peppers, red bell pepper, and next 5 ingredients 8 times or until finely chopped. Add vinegar, olive oil, and bread; process until smooth (about 30 seconds).
Barbecue, Biscuits & Beans: Chuck Wagon Cooking
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