Gently melt cheddar cheese over a double boiler (or on low in the microwave) and beat in some low carb milk substitute or some broth if you like a savory dip. Works fine but tends to congeal faster than cheese sauce made with a flour base, so keep it warm while serving.
Hmmm, I would try making it sort of like a fondue so that you good texture.
For nacho cheese sauce you probably don't want to start with a wine base, so maybe a low-carb beer or tequila to give it a little bit of that flavor would work. Corn starch is obviously a no-no, but I am not sure off the top of my head of Think'N'Thin or Xantham Gum would have the same anti-clumping properties, well, there is one way to find out....
Cook it over a double boiler or very low heat, and when almost ready to pour over the nachos try adding some chopped jalepenos/red pepper and possibly some cumin for a little extra kick.
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