Soak the dried mushrooms in cold water until they are fully rehydrated, about 20 minutes
Agitate the mushooms in the water vigorously to remove any clinging dirt.
Remove the mushrooms from their juice with a large slotted spoon, then strain the liquid through a fine strainer or sieve. Mince the mushrooms with a knife.
Saute the shallot and the butter until the shallots are translucent, about 1 minutes. Add the sherry and cook for a minutes, then add the chopped mushrooms, and their liquid, thyme then season with the salt and cook on medium heat until almost all of the liquid is evaporated, this should take about 10-15 minutes.
When almost all of the liquid is evaporated, remove the duxelles and place in a container in the fridge, uncovered. Once the mixture is totally cooled, cover it with plastic wrap until needed. Cooked mushrooms duxelles should be eaten within 3 days. The duxelles can also be frozen.