Grate the cheddar cheese while very chilled, but then let the grated cheese get back to room temperature. In the bowl of a food processor, whirl the cheese, butter, mustard, sherry and cayenne pepper until smooth and creamy
Transfer to a mixing bowl, cover and refrigerate until needed. (You can do 2 weeks before serving.) Remove from refrigerator 1 hour before serving; fold in the nuts and repack into four 1 cup ramekins of crocks. Dust with chives for garnish
Serve with crackers, or a crunchy vegetable like celery or fennel or jicama.
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