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These chilies will probably be used to make mole. Oaxaca is known as the city of seven moles.  They are very labor intensive, thick sauces that are especially good with either chicken or pork.

They're a complex mixture of chilies, fried seeds, bread, cinnamon, allspice, and other ingredients, which are then pounded together in a mortar and pestle or ground in a blender, then thinned with broth and served. There's amarillo (yellow); verde (green); chichilo (inky black); colorado (colored) and my favorite name mancha manteles (tablecloth stainer) which includes fruit. 

But the most commonly available are mole negro (black) which includes unsweetened chocolate, and coloradito (colored a bit) a bright orangey red.  Fortunately, every butcher shop sells them already prepared, which means it isn't just for 'special occasions' anymore. We brought some back with us despite the sign at the airport stating that moles were prohibited in your carry-on !