Melt the butter in a saucepan over medium heat. Sauté the jalapeno pepper for about 3 minutes, then whisk in the flour and stir for about 1 minute until bubbly and golden.
Gradually whisk in the milk. Add in the shredded cheese and paprika and whisk continuously until smooth. The sauce should start to thicken.
Season with salt and pepper to taste. Once it's creamy and thick, remove from heat and serve with tortilla chips.
**This can also be made first and reheated right before you're ready to serve.