Heat water for pasta, salt water and cook pasta to al dente.
While pasta water comes to boil, heat extra-virgin olive oil, 1 turn of the pan, in a deep skillet over medium-high heat. When oil is hot, add bacon and crisp, 5 to 6 minutes. Remove with a slotted spoon and drain on paper towels. Add onions and cook 10 minutes until soft and beginning to caramelize. Add wine and cook out, 1 minute.
While onions cook, heat a sauce pot over medium heat. Add butter, melt and whisk in flour. Cook 1 minute then whisk in stock and milk and bring to a bubble. Thicken a few minutes then season with salt and pepper. Melt in cheese stirring it in a figure-8 motion with a wooden spoon. Add nutmeg and mustard and adjust salt and pepper.
Drain pasta, toss with onions and stir in cheese sauce to coat. Top with crispy bacon and serve.
Recipe courtesy of Rachael Ray, 2007