2 c. water
2 c. peeled potato cubes
3 tbsp. butter
1 small onion, chopped fine
3 tbsp. flour
pepper to taste
3 c. milk
1/2 tsp. sugar
1 c. shredded Cheddar cheese
1 c. cubed cooked ham

Bring water to boil in large pan. Add potatoes and cook until tender. Drain, keeping liquid. Measure 1 cup; add water if necessary. Melt butter in pan over medium heat. Add onion. Cook and stir until tender but not brown. Add flour and season. Cook 3 to 4 minutes. Gradually add potatoes, liquid, milk and sugar to onion mixture. Stir well. Add cheese and ham. Simmer over low heat 30 minutes, stirring often.

Makes 12 servings.