Place a small amount of olive oil in a heated, nonreactive rondeau. Add the onions and garlic. Cook until the onions are tender. Season with salt and pepper. Allow to cool slightly.
Quarter the tomatoes. Place the peppers in a strainer. Allow to drain. Place on paper toweling to remove any excess liquid. In small batches, place the red peppers, tomatoes and onions in a food processor fitted with a metal blade. Purée to desired spreadable consistency. Add back to the rondeau.
Add the sugar, vinegar, salt and pepper in the rondeau. Bring to a boil. Simmer over low heat. Stir frequently. Simmer until liquid has reduced and mixture has thickened. It will burn easily at this point. Watch the mixture closely.
Season with salt and pepper. Allow to cool. Place in a storage container. Cover and refrigerate until needed.