Soak the dried chilli in hot water for about 20 mins or until they have softened. Wash and squeeze out the excess water.
Place the Assam/tamarind in a bowl. Add 1 cup of water to the tamarind and use your hand to squeeze the tamarind until the seeds come out.
Pour the tamarind over a sieve and using your hand to extract the juices from the tamarind to get tamarind water.
Put the shallots, chilli, dried chilli, garlic and 1 tsp of oil into a blender. Blend them finely.
In a non stick pan, heat up 3 TBsp of oil over medium low heat.
Pour the blended mixture to the pan and saute for about 5-6 mins, Turn the heat to low.
When it is aromatic, add in tamarind juice, 1/2 tsp salt and 3 TBsp sugar and fry until a layer of chilli oil surfaces (about 2-3 mins). More water can be added if it is too dry. More sugar can be added according to taste.
Serve the chilli sauce with Mee Siam.