Remove the seeds and tough inner parts from the large red chilies.

Add the sliced large chilies, small chilies, and garlic to a saucepan with half of the water. Simmer over medium heat for about 5 minutes, or until soft. Let cool to room temperature.

Add the cooled chilies and garlic to a blender with the remaining water. Blend until smooth, then strain through a fine mesh sieve to remove solids.

Transfer the strained mixture to a saucepan. Stir in vinegar, sugar, and salt. Simmer over low heat until slightly thickened. The sauce will thicken more as it cools.

Let the sauce cool completely, then store it in an airtight container in the fridge. It keeps well for several weeks.