I put the water in a pot and brought it to almost boiling. Just when bubbles start to form on the bottom of the pot. The hot water helps reconstitute the dried coconut.
Put one cup of coconut chips in the blender and pour in half the water. Let this mixture sit for about a minute so the coconut can soften up. Be careful. Especially when you turn your blender on. The steam from the hot water will make your lid pop off if you're not careful so make sure you are holding the lid down when you first hit the power button.
I don't think it matters much which setting you use but my blender has a grate setting and that is what I used. Turn the blender on, holding the lid down until it gets going. Let it run for about 2 to 3 minutes.
Pour the coconut milk through cheesecloth or a very fine mesh strainer.
Put the coconut back in the blender and add the other cup of dried coconut. Pour in the rest of the water. Let it sit for a minute or two and repeat the previous steps.
Straining the second batch the same way and pour all of the milk into a jar, cover and store in the refrigerator.