Preheat oven to 400° F. And grease the bottom of your oven safe casserole dish.
Peel the potatoes and thinly slice each potato crosswise into rounds about 1/8th inch thick. (A mandolin works wonders for this). Place potatoes in a large bowl and cover with cold water to prevent from browning. (This happens because of oxidation).
In a medium size sauce pan over medium heat, heat olive oil. Then add in the onion and garlic. Season with salt, pepper and a pinch of nutmeg . Sweat the onions; Cook for 5-7 minutes or until onions start to glisten and look wet or “sweaty!”
Add in the butter and melt. Then whisk in the flour for about 30 seconds.
Start to gradually whisk/stir in the milk or heavy cream. Start with about 1/4 cup and gradually add in until the 2 ½ cups are used up. Whisk constantly so there are no lumps. Lastly stir in 1 cup of the shredded cheese. You’ve made cheese sauce! (Reserve the other cup to top on the potatoes).
Drain the potatoes from the water and pat dry with paper towels.
Using a ladle, ladle a thin layer of cheese sauce down in a 3QT oven safe casserole dish/porcelain baker. Add 2 even layers of potatoes on top. Spoon more sauce over potatoes, and repeat sauce and potatoes until ingredients are gone and casserole dish is mostly full.
Sprinkle remaining 1 cup of cheese on top.Cover loosely with foil and bake for 1 hour and 15 minutes with the foil on and15 minutes with the foil off. Potatoes will be very tender and cheese will be bubbling!
Garnish with chopped chives. Let rest for 30minutes before slicing and serving.