In a medium pot put the water, sugar and sliced chilli and bring to a boil. Cook this over medium heat for about 10 minutes until it thickens slightly and the chilli has infused with the syrup. Remove the chilli and seeds with a slotted spoon.
Add the 2 cups of tightly packed berries (fresh or frozen) to the pot and cook for about 3 – 4 minutes. Take off the heat.
Using a stick blender or a food processor, blend the berries and syrup until smooth. Allow to cool.
When you are ready to serve, take a wedge of lime and run it around the rim of your glass. Dip this into sugar or salt to coat the edge.
Put the berry syrup, tequila, orange liqueur, lime juice and a handful of ice into a cocktail shaker and shake vigorously. Fill glasses with ice and top with the berry margarita cocktail mix.
Garnish the glass with wedges of lime, a few fresh blueberries and if you want additional heat, a few more slices of jalapeño.