Melt butter in a saucepan over medium heat. Add onions and sauté until tender.
Add garlic, chili powder, smoked paprika, and cayenne pepper and sauté for an additional minute.
Stir in tomatoes, vinegar, Worcestershire sauce, sugar, salt and black pepper. Bring to boil; reduce heat and simmer 15 minutes, stirring often.
Process with blender or food processor until smooth. Let cool to room temperature and store covered for up to 2 weeks.
Serve with chicken, fish or meat.