In a medium saucepan over medium heat, cook onion in butter for 5 minutes. Add garlic and cook 1 more minute.
Add all ingredients to saucepan except hot dogs, buns, and jalapenos. Mix well, reduce heat and simmer for 30 minutes. Remove sauce from heat and cool 10 minutes.
Puree sauce in pan with an immersion blender or transfer to a regular blender and blend until smooth.
Grill hot dogs on a gas grill or charcoal grill until heated through. Serve on buns topped with barbecue sauce and jalapeno slices.