Sterilize jars - Fill your water bath and add the empty jars. Boil for 10 minutes to sterilize the jars. Add you tongs, ladle, and strainer to the water to sterilize as well.
Prep and purée the peppers - wash, destem, and deseed the peppers. Cut the peppers into small chunks. Puree the peppers and 1 cup of vinegar in your food processor.
Begin the jelly - Combine the puree, 1 cup of vinegar, and the sugar in a deep saucepot. Bring to a boil and boil for 10 minutes, stirring constantly. Stir in the liquid pectin, and return to a rolling boil for 1 minute. Remove from the heat.
Fill the jars - Ladle hot jelly into jars, leaving 1/4 inch headspace.
Process - Process 10 minutes in a boiling water canner. Let rest for an additional 5 minutes off the heat before removing from the jars from the water.