Serrano Grits with Cheese

1. * Serrano Chiles should be seeded and chopped.
2. ** Use Shredded Monterey Jack Cheesei in this recipe.
3. Cook and stir the bell pepper, onions, and chiles in the margarine in a 10 inch skillet until the pepper is tender.
4. Heat the milk, water, salt and pepper to boiling in a 2-quart saucepan.
5. Gradually add the grits, stirring constantly, and reduce the heat when they have all been added.
6. Simmeri uncovered, stirring frequently, until thick, about 5 minutes.
7. Stiri in the bell pepper mixture and cheese.