Saute onions in olive oil until they start to soften. Add garlic and stir until fragrant. Mix in peaches, nutmeg and bourbon. Bring to a simmer.
Mix in tomato paste, vinegar, Worcestershire sauce, mustard, brown sugar, black pepper, salt, and 2-4 TBS water. Bring back to a simmer and cook covered for 20-30 minutes, stirring frequently.
Add hot sauce and enough remaining water so that you can blend the sauce. Blend with an immersion blender until smooth. Let sit overnight for flavors to develop.