Whole Red chilies are used in Indian curry dishes to add a heat kick. They are often added during the "vaghaar" or oil tempering process where oil is heated and spices like cumin, mustard and red chilies are added to infuse the oil. The oil is then subsequently added to the final dish.
To lessen the heat of these chilies, shake loose and remove some of the seeds from the open end of the chilli. These stemless dry chillies are usually removed from the dish at the time of eating the dish.