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1. Add butter to stockpot. Melt over medium heat.
2. Stir in hash brown potatoes, chopped onion, and sauté 7 minutes, stirring frequently.
3. Stir in the flour, coating vegetables.
4. Stir in milk, bacon bits, salt and pepper.
5. Simmer 20 minutes, stirring occasionally.
6. Gradually stir in cheese in small batches, stirring each batch until it melts.
7. Serve hot.
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