Joan has given you good advice, Journey. BTW, what a wonderful name "Amity" is for a community. I used to live on Highway 99 but at the other end of Oregon. The Rogue River was right across the little highway. . . Boy, there's a difference in names: Rogue vs Amity

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Anyway, for smaller peppers, get a nice long string; tie a slip knot, tie a slip knot, tie a slip knot, tie a slip knot, tie a slip knot, tie a slip knot, tie a slip knot, tie a slip knot . . . push a pepper stem thru every knot as you tie 'em ! Hang as festive garlands in your home

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I hope your grandfather left all the stems on! If he didn't - - give 'em back

! Serrano hold onto their stems well. Not all is lost if they don't have stems . . . lay them out in a large flat basket, put 'em in a very dry place, and stir and turn at least once a day. I suppose that you could use a string on a needle and "thread" your peppers, tying a big knot between each so they don't slide together, but I've never done that.
If your humidity is high and the peppers large, you may have problems with them - watch for spoilage. Cut those off and toss 'em. After they are good and dry - they can go first into paper bags. Watch 'em again - for mold. Once you are confident that they are well-preserved, they can be crushed into flakes (be careful with the eyes

) and stored in jars.
You've got an enormous amount of peppers for most American families. My guess is that Serrano won't be your 1st choice to plant in '10. That's great, there are lots more choices to add to your spice cabinet next fall. And, you can grow more Serrano in '11

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Steve