In a small pot, bring water, milk, and salt to a boil. Slowly stir grits into boiling mixture. Stir continuously and thoroughly until grits are well mixed. Let the pot return to a boil, cover pot with a lid, lower the temperature, and cook for approximately 30 minutes stirring occasionally. Add more water if necessary.
Grits are done when they have the consistency of smooth cream of wheat. Stir in half the butter and serve with remaining butter divided equally on top of each portion, or serve with fruit or with a savory meal.