In a small bowl, combine mustard seed and dry mustard; set aside.
In a 1- to 2-quart non-aluminum pan, combine remaining ingredients. Simmer uncovered, on medium heat until reduced by half, 10-15 minutes. Pour the mixture into the mustard mixture. Let mixture soak at room temperature 24 to 48 hours; adding additional vinegar if necessary in order to maintain enough liquid to cover seeds.
Process the seeds and mixture in a blender or food processor until pureed to the texture you like (this can take at least 3 or 4 minutes).
The mixture will thicken upon standing.
If it gets too thick after a few days, stir in additional vinegar. Scrape mustard into clean, dry jars; cover tightly and age at least 3 days.