Put water and chiles in a bowl. Weight chiles so they are covered with water. Let soak 1 hour, until chiles are soft.
Place the chiles, soaking liquid and remaining ingredients into a blender. Blend until as smooth as possible, adding water as needed to make a pourable consistency. Don't worry about making it perfectly smooth. CAUTION: Keep blender lid covered and keep face away from blender. Do not breathe the fumes. This sounds scary but the agitated water/chile vapor can irritate your throat and make you cough. Once the mixture calms down a little there's no problem. Fermentation reduces the heat level of chiles, so the sauce will mellow as the bacteria (lactobacillus – the same bacteria that make yogurt) digest and deconstruct the hot chile molecules.
Pour the mixture into a clean gallon jar and cover with a loose lid. CAUTION: If the jar is sealed tightly pressure could build up and blow hot sauce all over your kitchen.
Place in a cool dark cabinet, at room temperature, about 70°. Label with the date and stir every day for 1–2 weeks, until fermentation activity stops and flavors mellow. After a week or so, it's good to taste the mix regularly. Start using it when you like the flavor. Blend again, if you would like a smoother sauce. Add water to adjust the consistency. Taste and adjust seasonings. I refrigerate my fermented sauces, but it is not necessary.