Gotta get regional on 'yo ass, but down in 'dis here 'hood it's chile, not chili. That's what y'all Tejanos and wanna be Tejanos eat (And no disrespect here. I love both Texas and texas-style chili, we've just got a different thing going over here in NM).
For the real-deal northern NM style chile (an indian/hispanic/basque hybrid) you need access to fresh/frozen/dried green chiles, the stuff in cans just won't cut it. Almost nobody (even here in NM) does dried green anymore, I got turned on to it by my ex-wife's grandmother, a real sweet and totally old-school basque lady. Tons-o-work; take a sack or two of freshly roasted green chiles, peel it all, then hang it on twine for several weeks. Strip it all off, load it into a pillow case, and toss it in the back of the closet. Keeps for years. I did six sacks a few years back, while it was drying the garage smelled heavenly!!! I figured I had 24hrs of slave labor wrapped up in those six sacks, spread it out over 3 afternoons 3 consecutive weekends. Oww, my back!!
WARNING: powered dried green chile is nowhere close to the same thing as whole dried green chiles. Do not used powered green for making this recipe, it WILL suck!
Anyway, green chile NM style..
Meat- Pork gives tons of flavor, traditional red chile here is strictly pork. Given the indig origins of the dish though, pretty much anything goes. I'll use singly or (usually) in combination ground pork, ground beef, or cubed sirloin. For an in-law presentation chile I'd always use 100% cubed sirloin, carefully trimmed. Strict judging there, but I always passed with flying colors. The ex-MIL enjoyed ribbing her (six total) daughters that I could cook better than they could.
Chile- Dried green is the ne-plus-ultra for chile, if you've got it. It has a smokey, jerkey'ish meaty flavor not found anywhere else. The favorite of everybody who's ever been exposed to the stuff. How-to: Bust up your dried chiles, add enough water to cover them, and simmer covered for an hour or so (warning, the steam gets rather toxic, ensure good ventilation). If using fresh roasted or defrosted frozen, just peel the chiles and chop 'em up.
Cooking- The key here (per my ex-MIL, a fantastic northern NM cook) is uninterupted high heat. You must have everything you're gonna need within arms reach, because things get kinda frenzied for a couple of minutes here.
-Fry up the meat in a large skillet, add oil if necessary depending on how lean the meat is. You'll need a small pool of hot grease left after the meat is browned for the next step.
-Push the meat to one side, then tilt skillet to create pool of hot grease on the opposite side. Shake in some flour (total for 2lb of meat will end up being between 3-6 tblsp) a bit at a time and stir in. The aim here is to create a paste (a roux if you're into french or creole cooking) and brown it.
-Sweep meat into browned roux and homogenize.
-Add (all at once) 2 cups of made-ahead hot beef bouillon, a bit on the thick side (note: the paste that comes in jars is far superior to cubes flavor wise). Stir vigorously so roux doesn't have a chance to clump. Note: some clumps will form anyway, not to worry they will dissolve during the simmer. You'll doubtless get some spattering, but that's just the price you pay.
-Immedietly add green chile. Lots of chile!
-Garlic. If you're using fresh garlic add it minced to the frying meat just a minute before making the roux. If you're using garlic powder add it now. Either way use a buttload!!!! No such thing as too much garlic.
-Simmer. Cut heat back to a vigorous simmer, you'll probably need to add more liquid at this point, especially if you're using fresh roasted or frozen chile. Simmer for an hour or two, longer if desired (6-8 hours isn't too long, as long as you stay attentive), stir periodically. Add water as needed to achive and maintain a gravy-like consistency.
-Eat!!! Yes, that's right folks; meat, chile, garlic, broth. That's it. Food of the Gods!
Spoon yerself out a big'ol'bowl of the stuff, straight up. Or slather it all over your fried 'taters & eggs on a Sunday morning, along with a tortilla or two, a brace of bacon and a nice hot cup'a joe, y'all ain't lived yet 'til you've done that!!
Variations- Corn, potatos, onions, tomatos etc... can all be added, but it then becomes green chile stew. Nothing wrong with any of it, mind 'ya, in fact make it myself on ocassion, but true green chile is the minimalist dish described above.
I probably make chile a couple of times a month, sometimes less depending on what cooking kick I'm on at the moment. Lately it's been my smoker, sucker's gotten a helluva workout the last couple of months! Ribs, brisket, ham, chickens, yummmmm.
-Eric
*edited to clarify a few points*