Kevin, there's a host of possibilities here ! while you may indeed have a mold problem , or a fungus that could cause difficulties with the successful rearing of chilies, it's also possible that what's growing in the pot along with your plants might be an edible mushroom! it happens with morels quite commonly here in the PacNW. ( do NOT eat mushrooms unless advised by a mushroom expert : read mycologist ) some fungi form beneficial mycorrhizal associations with the roots of flowering plants; a symbiotic relationship where nutrients are shared. or it could be just a "toadstool". maybe even a toxic one. anyway, one thing i know for certain ... it's flat-out impossible to identify mushrooms by e-mail !! so check with a pro. regards peter g "Mycology beats Urology any day." Bryce Kendrick