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Forget the po-mo, Pachuco, and stick to the classics

$75 for dinner for two with margaritas, tax and tip

We are sitting in a dark, low-ceilinged basement, munching on homemade and slightly too-thick tortilla chips, when a dark and sultry woman walks by our table. She is wearing a black-and-red dress. Long, with a fair number of ruffles. Ten minutes later, another woman passes by, dressed in turquoise.

Turns out they're flamenco dancers about to perform upstairs at the Spanish restaurant Embrujo Flamenco and they use the back room of Pachuco for changing. Pachuco is the child of the three Fernandez sisters (Jais, Eren and Mali), whose parents operate Embrujo Flamenco upstairs.

For anyone who's been to a taqueria in Mexico, Pachuco will look and taste familiar in its utter lack of pretension and formality. This could be the Fernandez family's basement. It's small, cramped, dark and funky. The three sisters claim their cuisine is Mexican modern, but the place feels old-school. The nod to modernity comes from additions such as chèvre, pear salsa and duck confit – and the iconoclastic tipples.

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The bartending sister (Jais) is the one we like best. For $15, she sells a margarita sampler, three choices from a long list. Skip the spicy mango – it's unremarkable. Strawberry-mint margarita sounds silly and girly but the coolness of the mint cuts the strawberry flavour. And cucumber margarita, barely sweetened, is Mexico's answer to the sophistication of Pimm's.

Three is a big number at Pachuco: Three sisters, three margaritas, and a sampler of three guacamoles. Having been taught to know and love guacamole with balls, first by Agave y Aguacate and more recently Grand Electric, we are no longer happy to live in guacamole blandsville. Which is where the Pachuco guac abides. Even the addition of chèvre in one and smoked trout in another cannot remedy the blandness. They also offer a guacamole with blue cheese, walnuts and caramelized onions, but that one just plain scared me. You couldn't pay me enough to do that to an avocado.

One ought to be eating only the taquitos here, for they are both creative and nicely executed. A back story of sweet spices turns duck confit taquito quite grownup. Po-mo salsas are of varying success: cooked-down pear salsa flatters the duck well, as does barely sweet pineapple-inflected fresh pico de gallo. Peanut butter in the arbol chili salsa we can do without.

Taquito of cochinita pibil is the classic pork cooked long and slow in achiote; it comes out tender, moist and chili-kissed. Along with the small heat is a great gravy with a hint of cinnamon for pizzazz. All the taquitos come with a cute basket of warm corn tortillas and fine-tasting black beans. Other than the zesty pineapple pico de gallo, their best salsa is hot chipotle salsa sweetened with just enough honey for balance.

Dessert is a near-miss. Crème caramel is about as old school as it gets and is no longer fun for foodies weaned on crème brûlée (five times as rich, 10 times more silky). Somebody has made a wonderful lemon cream, a citrus cloud that deserves inhaling. But the chef has wrecked it by layering the supernal cream with Maria cookies (store-bought, boring), which have absorbed the majority of the cream. Bummer. Use half the cookies and double the lemon cream and it would be a dessert to cross the street for.

More free advice: Keep the loud rock music; keep the 1950's silent black and white movies playing behind the bar – they go with the low ceiling and the dim lighting. Encourage the flamenco dancers to walk through more often. It adds immeasurably to the atmosphere. But most importantly, specialize. Do what you do best. Lose all the appetizers. Let people get a little drunk on the lovely margaritas and feed them taquitos. Be the best damn taqueria east of Kensington Market.

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