Finely chop the red onion and garlic. Squeeze the lime juice.
In a medium saucepan, heat the olive oil over medium heat. Add the red onion and garlic and sauté for 2-3 minutes, or until translucent.
Pour in the tequila and cook for 2-3 minutes to allow the alcohol to evaporate.
Add the tomato puree, honey, lime juice, chili powder, and smoked paprika. Stir well to combine.
Reduce heat to low and simmer for 10-15 minutes, or until the sauce has thickened slightly. Season with salt and black pepper to taste.
For a smoother sauce, blend with an immersion blender. Alternatively, serve chunky. Let the sauce cool slightly before serving with grilled meats, chicken wings, or roasted vegetables.
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