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At least 1 hour before smoke cooking, soak wood chips in enough water to cover. Drain before using.
In a small bowl combine chili powder, 1/4 teaspoon salt, cumin, dry mustard and pepper. Sprinkle spice mixture over steaks and rub in with your fingers.
For a charcoal grill, arrange medium-hot coals around a drip pan. Test for medium heat above the pan. Sprinkle the drained wood chips over the coals. Place steaks on the grill rack over drip pan. Cover and smoke 16 to 20 minutes for medium rare (145°F) or 20 to 24 minutes for medium (160°F), turning once. Brush the cut sides of avocados with 1 teaspoon lime juice. Add to the grill rack over the drip pan, cut sides up, the last 8 to 10 minutes of grilling or until softened. (For a gas grill, preheat grill. Reduce heat to medium. Adjust for indirect cooking. Smoke as above, except add drained wood chips according to manufacturer's directions.)
Scoop flesh out of avocado peels into a medium bowl. Add horseradish, the remaining 2 tablespoons lime juice, garlic, the remaining 1/4 teaspoon salt and cayenne pepper. Mash with a potato masher or fork until nearly smooth.
Sprinkle steaks with cilantro and red onion. Top with the sauce.