Preheat oven to 350 degrees F. Heat olive oil in a large skillet over medium-high heat. Add onions and saute for about 5 minutes (or until translucent). Add garlic for 30-60 seconds
Add the next 5 ingredients (bell pepper through salt) to skillet and boil gently over med-high until slightly thickened (about 10-15 minutes). Remove from burner and let cool slightly.
While enchilada sauce is cooling, shred chicken and place in bottom of 9 x 11 baking dish. Your can use store-bought rotisserie chicken or you can slow cook raw chicken breasts ahead of time. I cooked raw chicken breasts in an instapot with some broth for 30 minutes.
Pour sauce from skillet into a blender and puree a few minutes until smooth. Pour over shredded chicken and bake until heated through (about 10 minutes).
Pull casserole out of oven and sprinkle the shredded cheese over the top. Place back in oven for 5 minutes or until cheese is melted.
Garnish with chopped pickled jalapenos and sour cream and serve.