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For sauce, in a medium saucepan cook onion and garlic in hot butter until tender. Stir in flour, salt, and pepper. Add milk all at once. Cook and stir over medium heat until thickened and bubbly.
Place half the sliced potatoes in a greased 3-quart rectangular dish. Top with half the sauce. Repeat layers.
Bake, covered, in a 350 degree F oven for 45 minutes. Uncover and bake for 40 to 50 minutes more or until potatoes are tender. Let stand, uncovered, for 10 minutes before serving. Makes 10 servings.