Take chillies in a blender and crush them coarse. Set this aside till use.
Take vinegar and sugar in a sauce pan. Mix well so it is melted. Now heat this and bring them to a boil. Boil gently for 1 min till sugar is melted completely
Add in chillies and boil on high flame for 8 to 10 mins.
Take it off the heat and let it cool down.
Once it is completely cooled, it will thicken more.. Store in a clean jar in fridge.