Put the vinegar and pepper pieces into a blender. Blend until the total measures about 1 1/2 cups. Combine remaining ingredients except sugar and paper mixture in a large pot and bring to a full boil. Add the sugar and pepper mixture and return to a full boil. Boil 1 minute and seal in sterilized jars. Process in boiling water 10 minutes. Place jars sideways on a rack and turn them every 5 minutes until the jelly thickens, to keep the tiny flecks of red pepper evenly distributed throughout the jelly.
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