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Cook sausage in a large skillet over medium heat until browned, stirring to crumble; drain well.
Layer chiles in a lightly greased 13 x 9 x 2-inch-baking dish. Sprinkle with sausage and cheeses.
Combine eggs, milk, and flour mixing well. Pour over sausage and cheese. Bake uncovered, at 325 degrees F for 45 minutes.
Serve with picante sauce and warmed flour tortillas.