In a small bowl combine the mustard seeds, lager, and malt vinegar. Cover and soak overnight.
Strain the liquid and reserve in a separate container. Place the soaked seeds in a food processor and pulse 7 to 8 times. In a double boiler, place the cracked seeds and add the strained liquid, allspice, pepper, salt, sugar, dry mustard, garlic, and horseradish. Cook about 90 minutes, stirring occasionally. Remove from heat and let cool, then refrigerate.