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In a 4-quart Dutch oven, heat oil over medium heat. Add onion and garlic; cook about 4 minutes or until tender. Stir in fajita seasoning.
Add the water, dry lentils, dried dill and salt to the onion mixture. Bring to boiling; reduce heat. Cover and simmer for 15 minutes. Stir in potatoes. Cook, covered, for 10 to 15 minutes more or until potatoes and lentils are tender.
Add undrained tomatoes, tomato paste and undrained chiles. Return to boiling; reduce heat. Simmer, uncovered, for 10 minutes. Stir in parsley. If desired, garnish individual servings with fresh dill.