For glaze, in a small saucepan combine the jalapeno jelly, lime juice, and garlic. Cook and stir over medium heat until jelly is melted. Remove from heat.
In a small covered saucepan cook onions in a small amount of boiling water for 3 minutes. Add squash; cook for 1 minutes more; drain. Trim fat from steak. Cut steak into 1-inch cubes. On eight 6- to 8-inch metal skewers, alternately thread onions, squash, steak, tomatillos, and sweet pepper.
For a charcoal grill, grill kabobs on the rack of an uncovered grill directly over medium coals for 12 to 14 minutes or until meat is slightly pink in center, turning once and brushing occasionally with glaze during the last 5 minutes of grilling. (For a gas grill, preheat grill. Reduce heat to medium. Place kabobs on grill rack over heat. Cover; grill as above.)
Serve kabobs with hot polenta, if desired, and any remaining glaze. Makes 4 servings.