Step 1: Bacon ... Saute the bacon on medium low heat, until the bacon is crispy and brown. If you render the bacon, you should not need any oil. I do prefer a non-stick pan, if possible. Once the bacon is done, transfer to a plate lined with a paper towel to drain.
Step 2: Vegetables ... In that pan with the bacon drippings, add the onion and jalapeno; and, saute for 3-4 minutes, stirring often, until the onions are tender and lightly caramelized. Remove from the heat, and transfer to a bowl to cool.
Step 3: Once they have cooled slightly, add the bacon; and, the optional roasted hot sauce, if you decide to add it. Mix to combine.
Step 4: Grits ... Add the milk and water to a medium size pot, and bring to a boil. Whisk in the grits, and a pinch of salt; and stir until combined. Reduce to medium low heat, and simmer for 15-20 minutes, stirring often until creamy. Follow package directions for the grits.
Step 5: Finish ... Once the grits are done; remove from the heat and add the cheese and the bacon mix. Stir to combine, cover; and, let it set 5 minutes before serving.
Step 6: Serve and ENJOY! ... As I said, these are great with my 'Fried Green Tomatoes;' but, I love these as is. They are spicy, cheesy, and delicious.
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