Place the seeded watermelon cubes in a sealable plastic bag and freeze for a minimum of 8 hours. You can do this days ahead if you are planning a party.
Before starting to make the beverage itself, cut one of your limes into 8 wedges for garnish. Cut the second lime in quarters and use it to moisten the rim of of your serving glasses. Place the sugar in a shallow bowl or small (dessert) plate. One by one, wipe the rim of each glass with the quartered lime, then dip in the sugar until you have a nice rim.
Place half of the frozen watermelon, along with half the limeade and tequilla in a blender.
Blend until the beverage is mixed and there are no fruit bits but it is still frosty and slushy.
Pour into prepared glass and serve with a lime wedge for garnish.