Saucy Ham and Potato Bake

2 T. onion, chopped

1/4 cup butter

1/4 cup flour

1 tsp. salt

1/2 tsp. dry mustard

dash of pepper

1 1/2 cups milk

2 cups shredded Cheddar cheese

6 potatoes, peeled and sliced thin

1/2 pound cooked ham, cubed

*Saute onion in butter. Blend in flour, salt, mustard, and pepper to form a paste. Gradually add milk, stirring constantly, until thickened. Mix in 1 1/2 cups cheese and stir until melted. Remove from heat and add potatoes. Toss until coated. Pour into a 9X13 pan. Top with ham and 1/2 cup cheese. Bake at 350 for 40 minutes.