Stir yeast into 1-1/2 cups warm water in large bowl; let stand until bubbly, about 5 minutes. stir in sugar, salt, pepper, tobasco, 3 tablespoons jalapeno, and enough flour to make a soft dough. knead dough on lightly floured board until smooth and elastic, adding remaining flour as necessary.
Let dough stand in warm place 15 minutes. punch down dough; roll on lightly floured board into a rectangle 13 x 4 inches, about 1 inch thick. Cut dough into 18 strips with floured knife. roll each strip gently to form rope 1/2-inch thick. Moisten ends of rope and press together to form bagels. Place bagels on floured cookie sheets. Let stand covered 20 minutes.
Heat one gallon of water to boiling in large stock pot. Reduce heat to medium. Place 3 to 4 bagels in stock pot. Simmer uncovered 7 minutes (no longer). Drain on towel. Repeat with remaining bagels. Heat oven to 375F. Brush bagels with beaten egg, sprinkle with remaining jalapeno pepper. Bake bagels on ungreased cookie sheet until golden, 30 to 35 minutes. Cool on wire rack.