The chiles that we traditionally use for this basic sauce are the ones we pull off our ristras or strings of chiles. Ristras are not just used for decoration here, we eat these chiles throughout the year in a variety of dishes. This sauce can be used in a number of ways, as a topping for enchiladas and tacos, as a basis for stew, or anything that calls for a red sauce.
Rinse off the chiles, place them in a pot and cover them with very hot water. Allow to sit for 15 to 20 minutes to soften. Drain and discard the water.
Sauté the onion and garlic in the oil until they are soft.Place all the ingredients, and the 1 cup of water, in a blender or food processor and puree until smooth. Strain the mixture, if desired, for a smooth sauce.