Grind jalapenos in the water in a blender. Mix flour and sugar together first then add to cool vinegar to prevent lumps. Then mix all ingredients together in a saucepan ad boil till peppers are transparent and mixture thickens. Stir frequently. Put in hot sterilized 1/2 pint jars and seal lids in hot water bath for 5-10 minutes. For each 1/2 pint jar of jalapeno butter, mix a package of softened cream cheese for the dip. Next, get out the chips!