Preheat the oven to 350 degrees Fahrenheit. Place the guajillo peppers on a baking sheet and bake for 5 minutes, until the peppers have puffed up and become aromatic. Remove the peppers from the oven and allow them to cool. Once cool to the touch, remove the seeds and stems.
Add the guajillo peppers, onion, garlic, cumin, chili powder, pepper, and diced tomatoes to a blender. Blend until completely smooth.
Heat the olive oil in a dutch oven or large skillet over medium-high heat. Add the guajillo pepper paste and cook until the paste starts to thicken and turn a dark red, about 3 minutes. Add the chicken broth and bring the mixture to a boil, then reduce to a simmer.
Simmer the sauce for 20 minutes to bring the flavors together. Add more chicken broth as nessessary. Season with sugar and salt, to taste. If the sauce has any bitter notes, add additional sugar to smooth out the sauce.