Melt the butter in a medium-sized saucepan on medium-low heat. Add the onions and peppers and cook, stirring, five minutes or until onions are soft. Add the garlic and cook for another minute. Whisk in the flour and cook, stirring, for 1 minute.
Slowly add the milk and cook, stirring constantly, until sauce has thickened, about five minutes. Stir in the pickled jalapenos and juice. Turn heat down to low and add in cheese, 1/4 cup at a time, stirring after each addition until cheese is completely melted. Add salt, to taste, if desired.