In a blender or food processor, chop apricots, peppers, and 1 3/4 cups of the vinegar until fruit and vegetables are finely ground. Pour into a heavy bottomed 8 to 10 quart pan.
Rinse food processor / blender with the 1 1/2 cups water and remaining 3/4 cup vinegar, pour into pan. Stir in pectin, bring to a full rolling boil over high heat, stirring constantly.
Quickly add sugar, still stirring. Return to a full rolling boil, then boil, stirring for 1 minute. (If using a 2 oz box of pectin, boil for 2 minutes.).
Remove from heat and skim off any foam. Ladle hot jelly into prepared half pint jars, leaving a 1/4 inch headspace. Process in a boiling water bath for 10 minutes. Adjust time according to your altitude.
Or omit processing and ladle jelly into freezer jars or freezer containers, leaving 1/2 inch headspace, apply lids. Let stand for 12 to 24 hours at room temperature, freeze or refrigerate.