When chopping hot peppers, wear gloves and don't touch your face or eyes.

In Dutch oven, combine apples with water. Cover and bring slowly to simmer; cook until apples are very soft. Pour into colander lined with square of dampened muslin and placed over deep bowl. Weight down with saucer and heavy can. Let stand until dripping stops. Discard pulp.

Pour collected juice into liquid measure; add enough vinegar to make 3 cups. Combine in saucepan with sugar. Bring to boil, stirring. Add peppers; boil briskly for 8-10 minutes or until set. Stir for 7 minutes to prevent floating peppers.

Pour jelly into hot, sterilized 8 oz. (1/2 pint) sterilized preserving jars. Seal with two-piece canning lids. Let cool and refrigerate. For long-term unrefrigerated storage, process in boiling-water bath for 5 minutes immediately after sealing jars.

Makes four (8 oz.) jars.