In pan fry the dried anchovies. Add 1 tbsp oil until crispy. Remove and set aside.
Combine chopped ingredients (chilies, shallots, garlic, lemongrass, candlenuts, soaked anchovies) in a food processor or blender—pulse for a coarse mixture. For me I like to blend it separately between chilies and other ingredients.
Heat oil in a pan (medium heat). Add the blended shallot, garlic, candlenuts and anchovies and cook (5-7 minutes), stirring often, until fragrant and softened. Then add chili paste cook about 10 minutes.
Add belacan (if using), palm sugar (or brown sugar), and lime juice (or tamarind paste)—season with salt.
Add sweet white onion and cook for another 5-7 minutes, stirring occasionally, until desired consistency (spreadable paste, not puree). And the last add fried anchovies.
Taste your sambal throughout the cooking process. If it's too, add little more palm sugar to balance the heat.
