Prepare sauce: Heat large heavy skillet over medium-high heat for 6 minutes. Add butter and oil. Stir in onions and chiles. Cook, stirring frequently, until onions are golden, about 15 minutes. Add tomatoes and sprinkle lightly with salt and pepper. Heat, stirring occasionally, to boiling. Reduce heat and simmer uncovered, stirring occasionally, until sauce thickens and fat rises to surface, about 30 minutes. Skim off fat.
Prepare beef: Heat large heavy skillet over medium-high heat 15 minutes. Add bacon and fry until crisp. Remove to paper towels to drain. Add oil to skillet. Stir in onion and saute until light brown, about 5 minutes. Add beef and brown on all sides, about 8 minutes. Sprinkle lightly with salt and pepper. Remove beef and keep warm.
Add sauce to onion in skillet. Stir in bacon. Cook over medium heat about 5 minutes.
To serve, divide beef among serving plates or place on platter, top with sauce, and sprinkle with jalapenos and cilantro. Serve with ot flour or corn tortillas.