Mix chopped peaches and 2 cups of the sugar in a non-reactive bowl or pot; cover and let stand about 30 minutes to macerate.
Mash the peaches, leaving some large chunks.
Use an immersion blender if you want the jam smoother.
Add peppers, zest, pecans and remaining sugar to the peaches.
Add lemon juice, vinegar and butter.
Bring to a full rolling boil, stirring constantly.
Stir in the pectin.
Return to a full rolling boil and boil 1 minute, stirring constantly.
Remove from heat and use a metal slotted spoon to skim off any foam.
Ladle quickly into sterilized jars to within 1/8 inch of tops.
Wipe jar rims and treads.
Cover with two-piece lid.
Screw on bands.
Process in a water bath canner for 10 minutes.
Makes about 9 half pints.