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Rinse red lentils and bring to a boil in a large pot of water. Once water boils, reduce heat to a simmer and cook, uncovered, until lentils are fully tender. This will take 30 to 45 minutes.
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While lentils are cooking, heat oil over medium heat in a large pot. Add chopped onion to the hot oil and cook until the onions are soft and golden. This will take about 15 minutes.
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Stir garlic and ginger into onion/oil mixture. Cook for one minute. Add mustard seeds, turmeric and cayenne. Cook for about two minutes. Add tomatoes, cooked lentils, shredded unsweetened coconut and coconut milk. Reduce heat and simmer until lentils are finished cooking.
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Season with salt. Stir in cilantro.
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Serve garnished with chopped peanuts, cilantro, chopped red onions, diced avocado, and chopped tomatoes.