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peel potatoes and cut into 1 inch cubes.
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bring water to a boil in large pot.
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add potatoes and cook until tender.
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drain reserving 1 cup of the liquid and set aside.
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peel and finely chop onion.
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melt butter in saucpan and add oinions to pan.
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cook until onions are translucent and tender, not brown.
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add flour to pan; season with cajienne pepper and balck pepper to taste.
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cook 3-4 min.
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add potatoes and reserved liquid
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add milk and sugar all into saucepan with potatoes and onions, stir well.
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add cheese and ham.
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simmer 30 minutes, stirring frequently.