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Preheat oven to 400 degrees F.
Soak the bread in ¼ milk, then squeeze out excess milk. Tear into pieces and add to a large bowl.
Add the onion, jalapeno, garlic, garam masala, salt, cayenne, cumin, egg, yogurt, and torn bread to a food processor or blender. Blend until smooth.
Transfer mixture to the large bowl and add the ground beef. Hand mix, but do not overmix.
Form the meat mixture into 24 equal sized meatballs and transfer to a lightly oiled baking sheet.
Bake for 20 minutes, or until the meatballs are cooked through.
While the meatballs are baking, heat the oil in a large pan to medium heat. Add the onion and serrano peppers. Cook for 5 minutes to soften.
Add the garlic and ginger and cook for 1 minute, stirring a bit.
Add the chiles de arbol and seasonings, and stir. Cook for 1 minute to let the spices bloom.
Stir in the fire roasted tomatoes, water, and lemon juice. Reduce heat and simmer for at least 20 minutes to let the flavors meld.
Cool slightly, then transfer to a food processor or blender. Blend until smooth.
Transfer the curry sauce to the large pan. Stir in lemon juice. Taste and adjust for salt and pepper.
Add the meatballs to the curry sauce and simmer for 10 minutes.
Top with chopped cilantro and red chili flakes and serve.