Wipe off any dusty crevasses on the chilis using a damp towel. De-stem and de-seed the chilis, but don't worry about getting rid of every last seed.
I put the chilis in a 400F oven for 1-2 minutes to awaken some dormant flavors; you could also flash them on a hot, dry skillet for 15-30 seconds in place of the oven.
Add the chilis to a bowl and cover them with hot tap water. Let them reconstitute for 20-30 minutes. If they float to the surface you can use a small plate or bowl to keep them submerged.
Drain the chilis and add them to a blender, along with the remaining ingredients listed above. Update: I've been adding 2-3 chipotles in adobo lately for some heat, but you can consider this optional.
Combine well; ideally you want a thick, paste-like substance so we are adding just enough liquid to get there. If it won't combine you can add another splash of water.
Use immediately or store in an airtight container in the fridge. It should also freeze quite well.