In a large bowl, combine 3 cups (12 oz) freshly shredded sharp cheddar cheese and 1 1/2 teaspoons cornstarch; toss or stir until the cheese is evenly coated with the cornstarch.

Pour 1 (12-ounce) can (1 1/2 cups) evaporated milk into a medium saucepan. Heat over medium heat, stirring occasionally, until small bubbles form around the edges and the milk just begins to simmer. Do not boil.

Remove the saucepan from the heat. Add the coated cheese to the hot milk a large handful at a time, stirring constantly after each addition until the cheese is mostly melted and the mixture is smooth before adding more.

If some pieces of cheese remain unmelted, return the pan to low heat and stir continuously until all the cheese has melted and the sauce is smooth and homogenous. Avoid boiling.

Stir in 2 teaspoons hot sauce (optional), 1/8 teaspoon salt, and 1/8 teaspoon ground cayenne pepper. Taste and add more cayenne or hot sauce as needed.

Serve immediately over nachos, fries, or steamed vegetables.