Soak the chilies – Place dried chili peppers in warm water for about 15 minutes to soften. Remove stems and seeds if you want a milder sauce.

Blend the base – In a blender or food processor, combine softened chilies, ketchup, lime juice, soy sauce, and dry sherry. Blend until smooth.

Cook the sauce – Pour the blended mixture into a saucepan. Stir in mustard powder, brown sugar, salt, and water.

Simmer gently – Cook on low heat for 30–40 minutes, stirring occasionally. The sauce will thicken slightly and the flavors will come together.

Adjust taste – Taste and adjust seasoning—add more lime juice for tang, sugar for sweetness, or a splash more soy sauce for umami depth.

Cool and store – Let the sauce cool completely, then transfer to a glass jar. It keeps well in the fridge for up to 2 months.