In a large skillet over medium heat, add the diced bacon and cook until crispy and browned, about 5–7 minutes. Remove bacon and drain on paper towel, retaining some bacon fat in the pan.

In the same skillet, add chopped onion and sauté until translucent, about 3–4 minutes, stirring frequently.

Add cooked bacon back into the skillet with diced tomatoes, 1 cup water, chipotle chile, lime juice, and kosher salt. Stir, bring to a simmer, and let thicken for about 10 minutes.

Lower heat to medium-low, stir in half cilantro, crack eggs into sauce, cover and cook for 5–8 minutes for desired yolk consistency.

Warm tortillas in a separate skillet for 1–2 minutes on each side, keeping covered with a kitchen towel.

Remove skillet from heat, sprinkle remaining cilantro and cheddar cheese over the eggs. Serve hot with warm tortillas and optional avocado or sour cream.