Dried chili peppers can last for months without losing their spicy kick. All members of the genus Capsicum retain their rich red hue and their distinctive taste when dried, but some varieties take on greater complexity of flavor after drying. Drying also enhances the versatility of chilies; you can use them in their dried form or rehydrate them to suit your recipe.
Depending on the variety you choose, dried chilies range from mild to wildly spicy. Capsaicin, the chemical responsible for a pepper's heat, varies from species to species. Ancho chili peppers are large and mild; they're the dried version of the mellow poblano chili. California chilies come from dried Anaheim peppers and are also mild. At the hotter end of the spectrum are dried cayenne peppers, chiles de arbol and Thai chilies. While there are exceptions, a general rule is that smaller chilies have more heat to them than larger ones. Wear gloves when working with extremely hot chilies to avoid skin irritation.
Toasting dried red chili peppers before cooking with them imparts a richer flavor. This extra step takes a few seconds, but produces better results for rehydrating or powdering. Make a cut from the stem end of the dried pepper to the pointed end, then open it to expose its interior. After removing its seeds, place the opened pepper in a clean, hot pan for a few seconds on each side until it begins to release its scent. If you're working with very small hot peppers, you can skip toasting them if you want to tame them somewhat. Snip off their tips near the stem and shake out the seeds, then add them directly to the soaking water to rehydrate them.
If you plan to use the peppers whole, diced or in slivers, you'll need to rehydrate them first. Add the whole toasted chilies to a bowl of warm water and let them soak until they become pliable, about 10 to 15 minutes. A properly rehydrated chili pepper should be flexible and slightly leathery to the touch. Slice it as you would a fresh chili pepper. Small peppers can go into a dish whole.
If you prefer to use your chilies in their dried form instead of rehydrating them, you can grind them after toasting to make your own spice powder. Place the seeded chilies into an automatic grinder or a mortar and pestle. Process them until they reach the desired fineness. When using an automatic burr-style coffee or spice grinder with hot chilies, allow the dust to settle for a minute or two before lifting the lid to avoid getting pepper dust in your eyes.