Remove the tops, seeds and stems from the chiles.
Place the chiles in a large bowl. Pour 3 cups of boiling water over the chiles. Place a plate on top of the chiles to keep them submerged.
Allow the chiles to sit for 30 minutes.
Once the chiles are softened, remove them from the bowl but reserve the liquid. Place the chiles in a blender or food processor. Add a little of the reserved water and blend the chiles until they are pureed. Add a little more of the reserved water so the mixture is just thin enough to put through a sieve.
Strain the sauce and discard the residual chile bits. Place them in your compost if possible.
Pour the sauce in a small sauce pan and bring to a boil over high heat and reduce the sauce to 1 cup. The sauce is ready to use or it can be refrigerated up to one week or you can freeze it in a suitable container.

4 ounces of dried New Mexico chiles

The chiles have been seeded, stems removed. The boiling water will be poured over the chiles.

After 30 minutes the chiles are soft and hydrated.

The chiles are in the blender, ready to be pureed. I'm not concerned about the stray seeds because they will be strained out before we reduce the sauce.
The chiles make a thick puree. I'll add some water then blend again and pour the mixture through a strainer.
This is the strained sauce. Now it will go in a pan to reduce down to one cup and the flavors will be concentrated.
The sauce is reduced and ready to use.