Dengue, a vector-borne disease, thrives in tropical and subtropical regions worldwide. A retrospective analysis of the 2002 dengue epidemic in Colima located on the Mexican central Pacific coast is carried out. We estimate the reproduction number from spatial epidemic data at the level of municipalities using two different methods: (1) Using a standard dengue epidemic model and assuming pure exponential initial epidemic growth and (2) Fitting a more realistic epidemic model to the initial phase of the dengue epidemic curve. Using Method I, we estimate an overall mean reproduction number of 3.09 (95% CI: 2.34,3.84) as well as local reproduction numbers whose values range from 1.24 (1.15,1.33) to 4.22 (2.90,5.54). Using Method II, the overall mean reproduction number is estimated to be 2.0 (1.75,2.23) and local reproduction numbers ranging from 0.49 (0.0,1.0) to 3.30 (1.63,4.97). Method I systematically overestimates the reproduction number relative to the refined Method II, and hence it would overestimate the intensity of interventions required for containment. Moreover, optimal intervention with defined resources demands different levels of locally tailored mitigation. Local epidemic peaks occur between the 24th and 35th week of the year, and correlate positively with the final local epidemic sizes (rho=0.92, P-value<0.001). Moreover, final local epidemic sizes are found to be linearly related to the local population size (P-value<0.001). This observation supports a roughly constant number of female mosquitoes per person across urban and rural regions.