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In a small saucepan, combine cheddar cheese and cornstarch. Toss until cheese is evenly coated.
Stir in evaporated milk and salt and pepper to taste (I like 1 teaspoon salt, and ¼ teaspoon pepper). Heat over medium-high heat, whisking occasionally, until cheese is melted and smooth, about 3 to 5 minutes.
Reduce heat to low, cover, and keep warm until serving time. Or, transfer to a slow cooker on the "warm" setting for serving.