In a double boiler, melt butter. Slice fresh jalapeno and add to the melted butter. Remove from heat, let sit for 5 minutes. Remove jalapenos, reserving for later if you wish. Return pan, bringing heat back up to medium-high. Toss in flour and mix. Add in half of your milk, followed by half of your cheese. Let the cheese sit for a minute, allowing it to begin melting. Stir to combine ingredients. Add in remaining milk and cheese. Stir until you have a smooth and creamy cheese mixture. Toss in all of your spices, stir well.
Arrange nacho chips on a plate and pour cheese over. Top off with pickled and cooked jalapeno slices. Or eat directly from the double boiler. Keep any remaining cheese on the stove, turn up the heat and stir as needed to keep smooth and warm.