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Place the jalapenos, half the green peppers and ½ cup of vinegar into a blender or food processor. Cover and process until pureed and then transfer it to a large Dutch oven. Repeat this with the remaining green peppers and another ½ cup of vinegar.
Add in the sugar, cayenne and remaining vinegar to the Dutch oven. Bring the pepper mixture to a roiling boil on high heat, stirring constantly. Quickly stir in the pectin and return to a roiling boil. Boil for one minute and stir constantly. Remove from the heat.
Skim off the foam at the top of the jam. Add in food coloring, if desired. Then carefully ladle hot mixture into hot ½ pint jars, leaving about ¼ inch of space at the top. Remove the air bubbles, wipe the rims and adjust lids to the top. Place the sealed jars into a boiling-water canner for 10 minutes or until the seals pop.
Serve the jam on crackers with cream cheese!