Peppers produce a chemical called capsaicin in the inner veins of the pepper fruit. Capsaicin causes a reaction in other organisms that simulates burning, and can actually damage insects and fungus. Capsaicin is a fatty acid and is not destroyed or removed through drying.
Drying is a common preservation technique that can be applied to a wide variety of foods, including peppers. Drying dehydrates food, thereby slowing the aging process and extending shelf life. People can use commercial dryers, which quickly and completely dehydrate peppers, or more common equipment such as an oven or the sun.
Drying peppers extends their shelf life from days to months. Drying also concentrates sugars, vitamins and essential oils into a much smaller area, which results in a more intense flavor -- and more heat per centimeter of pepper. People should clean the peppers and discard any dirty, decaying or sickly peppers before drying.
Dried peppers last three to four months. Dried peppers can be chopped up and used directly in sauces and other dishes, or rehydrated and used as a substitute for fresh peppers. Dried peppers have an equivalent nutritional value to fresh peppers, though some vitamins, especially A and C, may be lost in the drying process.