Begin by shredding your sharp cheddar cheese if you haven’t already. Freshly shredded cheese melts better than pre-packaged shredded cheese.
In a small bowl, combine the cornstarch with a couple of tablespoons of the evaporated milk. Stir until smooth, and set aside.
In your medium saucepan, pour in the remaining evaporated milk and heat it over medium heat. Stir occasionally to prevent it from scorching.
Once the milk is warm (not boiling), gradually add the shredded cheese, whisking continuously for a smooth sauce.
After the cheese is completely melted and smooth, add the cornstarch mixture to the saucepan and stir to combine.
Add the salt, cayenne pepper, and hot sauce if using. Taste and adjust the seasoning as desired.
Transfer the nacho cheese to a serving bowl and enjoy it warm with tortilla chips or over nachos.
