Combine watermelon, fresh lime juice and 3 tablespoons sugar in a blender container. Blend on medium speed until smooth. Taste and add more sugar as needed.

Pour approximately half of the slushy mixture into a 8x8 or 9x9-inch pan and place in the freezer for 1-2 hours or until lightly frozen. It should break easily into big chunks. If you leave it in the freezer longer, allow to thaw slightly before proceeding. Keep the rest of the mixture in the blender container, cover and place in refrigerator.

Break up frozen slushie mixture with a fork. Remove blender container from the refrigerator and add the frozen chunks. Blend on medium till thick and smooth. Serve immediately.