For the lamb: In a small bowl, stir together the chili powder, cumin, thyme, sugar, salt, allspice, and black pepper. Sprinkle the spice mixture over the chops, rub it evenly all over the meat, and chill the chops, covered, for at least 4 hours or overnight. Prepare a grill with glowing coals or preheat the broiler. On the oiled rack of the grill or on a broiler pan in the broiler, grill or broil the chops 4 inches from the heat for 5 to 7 minutes on each side for medium-rare meat. Serve the chops with the pepper jelly.
For the pepper jelly: Cut the bell peppers into 1-inch pieces and in a food processor chop them very fine. Transfer the chopped peppers to a deep kettle, add the sugar, vinegar, and red pepper flakes, and bring the mixture to a boil, stirring until the sugar is dissolved. Stir in the pectin and boil the mixture over moderately high heat, stirring, until it reaches the jelly stage (222F on a candy thermometer). Transfer the jelly to sterilized Mason-type jars (see sterilizing instructions on the pectin package), filling the jars to within 1/4 inch of the tops, wipe the rims with a dampened towel, and seal the jars. The jelly keeps, sealed, in a cool dark place indefinitely. Makes about 7 cups.
Notes: This recipe is not very spicy hot at all. We use it on regular toast for breakfast as well with for the grilled lamb chops. If you want it spicy, I would recommend doubling the amount of red pepper flakes. It also makes a huge batch--could easily be halved.