Take medium-sized dudhi (bottle gourd) pieces and grate them using a large-hole grater. Keep aside.
In a pan, heat 1 tbsp oil. Add 2 tbsp peanuts, 1 tbsp coriander seeds, 1 tsp cumin seeds, 4–5 garlic cloves, and 2 chopped green chilies. Sauté for 2 minutes, then transfer to a plate and let it cool.
Once cooled, transfer the mixture to a grinder jar and grind it coarsely. Keep aside.
In another pan, heat 2 tbsp oil. Add ½ tsp mustard seeds, a pinch of hing, 2 dried red chilies, and some curry leaves. Sauté for a few seconds.
Add ½ cup sliced onions and sauté until they turn slightly soft.
Now add 1 cup grated dudhi and salt. Sauté on medium flame until the dudhi becomes soft.
Add ¼ tsp turmeric powder, ½ tsp red chili powder, and the prepared coarse masala. Mix well and cook until the oil starts to release from the sides.
Switch off the flame and add 2 cups of curd. Mix well.
Dudhi ni dahi tikhari is ready. Serve with rice or roti.