I have never made a sauce with dried peppers, but I suppose that it would impart a nice smoky flavor to the sauce. I usually make powders with my dried pods, and that way, you can add a little or a lot to whatever you eat for a great kick without a ton of gritty-ness. Superhots like the Bhut Jolokia are especially good for powders, since they have such a unique, strong flavor and a super-intense heat, so you can use just a smidge and kick up the burn and the flavor of your food. Especially great on pizzas, in pasta, or mixed in with ground meat for burgers. Very versatile (can you tell I love pepper powders?!).