Preheat oven to 350. In large skillet, brown ground beef; drain. In small bowl, combine picante sauce, water and tomato sauce. Stir 1/2 cup sauce mixture into beef along with chilies, 1/2 cup cheese and 1/2 can French fried onions; mix well.
Spread 1/2 the remaining sauce mixture in bottom of 10 inch round baking dish. Stuff cooked shells with beef mixture. Arrange shells in baking dish; top with remaining sauce. Bake, covered at 350 for 30 minutes or until heated through. Top with remaining onions and cheese; bake, uncovered, 5 minutes or until cheese is melted.