I call this my "firecracker" applesauce because it has a little bit of kick to it from the serrano chiles.
Combine the chopped apples, chiles, vinegar, salt, clove, bay leaf, and cinnamon stick in a large, heavy-duty saucepan over medium heat. Cook, stirring frequently, for about 15 minutes, or until the apples are falling apart and the mixture has reduced by half. Remove from the heat and allow to cool. Remove and discard the bay leaf. Stir in the finely diced apples and pour into a nonreactive container. Cover and refrigerate until ready to use.