1
: In a saucepan, melt butter over medium heat. Add flour and cook, stirring for 2 minutes, but do not colour. Whisk in evaporated milk. Bring to a gentle simmer; stirring constantly (sauce is thin at this stage). Remove from heat and stir in both cheeses, salt, nutmeg and pepper sauce, if using. Stir to melt cheese.
2
: Transfer to a fondue pot and place over low heat to keep warm, but not boil. Add extra milk or water to thin sauce, if desired.
3
: Arrange vegetables and bread on platter and basket. With long fondue forks, dip bread and vegetables into sauce. (There is a tradition that if a piece of food is dropped in the pot, you kiss the person next to you!!!).