Trim the stem end ofthe jalapeño pepper, then cut them in half and remove the pith and majority of the seeds, leaving only a small amount for a touch of heat. If you want the appearance of seeds in your jelly but with minimal heat you can add the seeds from the bell pepper.
Process the peppers in a food processor until they are finely chopped, about 10 to 15 seconds. You should have 1 cup of chopped jalapeño peppers.
Remove the stem and trim the bell pepper, cut into pieces and process until finely chopped, about 10 to 15 seconds. You’ll have about 1 cup of chopped bell peppers.
Transfer the chopped peppers to a large kettle or stockpot.
Add the sugar, vinegar, water and butter. Stir to blend together.
Cook over low heat until the sugar is completely dissolved, stirring occasionally - about 15 to 20 minutes.
Raise the heat to medium and bring the jelly to a boil. Boil for 5 minutes then remove the kettle from the heat and let the jelly set for 20 minutes.
Stir the liquid pectin into the jelly and return the pan to medium heat. Bring the jelly back to a boil and boil for 1 minute.
Ladle the jelly into sterilized jars and keep the jam refrigerated or process the jars in a water bath following the jar manufacturers directions.