Usually when you buy dried chiles you will buy them in a cellophane package or on a rista and sometimes you can buy them in bulk. In either case you want to use chiles that are whole, not broken or split open. They shoud be tough, yet slightly bendable with no discoloration or light spots. They should also be uniform in color and evenly dried. Once you have picked out the best possible chiles, it is time to re-hydrate them for use in recipes.
Next you will want to cut the top off of each chile to remove the stem. Then, cut a slit down the side of the chile to split it open. The majority of the seeds will shake right out. Use your fingers or a spoon to scrape any additional seeds off and pull off any dried veins.
After discarding the seeds, place the chiles on a medium/hot comal (or griddle) and roast them for 3-4 minutes. Turn them often to prevent burning. If they do burn, they will need to be discarded as they will impart the burnt flavor to anything you make with them.
After roasting the chiles, place them in a bowl and cover them with hot water. The chiles will need to soak 20-30 minutes depending on how thick they are. Use a spoon to occasionally push them under the water if they float too much.
After you soak the chiles the water will be a brownish color like very diluted coffee. Depending on the chile, it may be bitter or it may have the chiles flavor in it, which may actually be similar in flavor to diluted coffee. If the water is bitter, discard it. If the water has a good flavor to it, you can use it in the recipe in place of any water that is called for. Or you can save it and use it to cook meats in or add it to other stews.
In some recipes you can use the chiles once they have been re-hydrated. You can chop them up and add them as desired. You will most likely need one more step though. In the old days, rehydrated chiles were ground up using stone tools and then added to the dish. With modern conveniences we can do this with a blender. (A food processor will do a reasonable job, but may not get it as smooth as necessary. I have a mini-food processor that has a smaller blade and does the job as well as a blender, and it's easier to clean.)
You will need to add some liquid to the chiles to blend them properly. The liquid will depend on what you're making. For general use, plain water is fine. Or if it is not bitter, you can use some of the soaking liquid. If you are making a sauce with vinegar in it, use a portion of the vinegar from the recipe.
Blend or process the chiles and liquid into a paste and use as needed. It is also convenient to add your seasoning to the chile paste. Throw a couple of garlic cloves in and you can avoid having to chop the garlic separately.