To easily peel a tomato, score an “X” on the bottom of the tomato with a sharp knife. Plunge into boiling water for 1 to 2 minutes or until the skin starts to pull away from the tomato. Remove from water. Let cool slightly and peel off skin with a paring knife.
Add the olive oil to a medium saucepan over medium high heat. Add the onions and sauté until soft, about 2 to 3 minutes. Add the yellow pepper and chile and sauté until soft, about 2 minutes. Add the garlic, celery seeds, mustard seeds, allspice and bay leaf and cook until garlic is soft, about 1 minute.
Add sugar, sherry, cider vinegar and lemon juice and bring to a boil. Add the tomatoes and season the mixture with salt and pepper. Reduce heat to medium and simmer until liquid thickens slightly, about 10 to 15 minutes. Remove bay leaf. Transfer to a medium-sized bowl or container. Let cool to room temperature. Stir in dill. Taste and adjust seasoning if needed. Cover and store in the refrigerator. Serve over crackers or as a sauce to accompany meat or fish. Makes about 2 cups.