Peel and devein the prawns if needed, then pat them very dry and set aside. Soak the dried chilies in hot water for 15 minutes and drain.
Make the rempah: blend the soaked dried chilies, fresh chilies, shallots, garlic, and belacan with 2 tablespoons water into a coarse paste.
Heat the oil in a wok or wide pan over medium heat. Add the chili paste and fry, stirring often, for 8 to 10 minutes until the oil separates at the edges and the raw smell is gone. Do not rush this step.
Add the sliced onion and cook for 2 minutes until it softens.
Stir in the tamarind water, sugar, and salt. Simmer for 1 minute so the flavors come together.
Raise the heat to medium-high, add the prawns, and toss for 3 to 4 minutes until they curl and turn opaque. Do not overcook.
Taste and adjust salt and sugar. Serve hot over rice or with steamed vegetables.