I'll leave it up to my mom to talk about the many uses for chile sauces. I can only pretend to be knowledgeable about New Mexico cooking.
This recipe was handwritten for Marsha (a Santa Fe native) by her mother Maria Elena (Meg). Marsha says that she can't quite make it right, though it always tasted great to me. I just don't think anything can ever taste as good as the memory of a mom's cooking.
--3 tbsp red chile powder*
--1 tbsp wheat or oat flour
--3 tbsp olive oil
Heat olive oil in a small saucepan on low heat. Add chile powder** and flour. Mix thoroughly "until cooked aroma is reached" (about one to one-and-a-half minutes). Slowly add water until the sauce reaches whatever consistancy you desire. Add salt and garlic powder to your taste. Simmer for about 3 minutes, stirring constantly. Remove from heat and let cool to desired temperature.
*Use REAL red chile powder, something freshly ground. Mom? A little help?
** When cooking with hot peppers, be careful not to breathe in the fumes. I would recommend wearing a mask. And don't touch your eyes!