Cover chilies with warm water. Let stand until softened, about 30 minutes; drain. Strain liquid; reserve. Remove stems, seeds and membranes from chilies. Cook and stir onion and garlic in oil in a 2-quart saucepan until onion is tender. Stir in chilies, 2 cups of the reserved liquid and the remaining ingredients. Heat to boiling. Reduce heat. Simmer, uncovered, 20 minutes; cool. Pour into a food processor Work bowl fitted with steel blade or into a blender container. Cover and process until smooth. Cover and refrigerate up to 10 days. Makes about 2-1/2 cups sauce.