In a bowl of an electric mixer fitted with a paddle attachment, beat together butter, cheese, salt, and pepper until blended. With the mixer on low, slowly add flour. At this point, your mixture will become dry and crumbly.
Mix in chopped jalapeños. Add water, one tablespoon at a time. Beat until the mixture just comes together into a ball. At this point, the mixture should be moist. If it feels wet, simply add a touch more flour. Divide the mixture into two discs, wrap in plastic wrap, and refrigerate for 25 - 30 minutes.
Once chilled, preheat your oven to 375 degrees F. Line a baking sheet with parchment paper or a silicone mat. On a lightly floured surface, roll out the dough very thin, about an eighth of an inch thick.
Then, using a pizza slicer, cut horizontal and vertical lines into your dough to create about 1-inch square crackers. Poke each cracker with a wood skewer or fork. Place crackers on prepared baking sheet.
Bake for 13 to 15 minutes until golden brown and crisp. Cool before serving. Chill in an airtight container for up to three days.
*To make the Jalapeño Cheese Crackers, simply omit the jalapeños and replace the Extra Sharp Cheddar Cheese with Jalapeño cheese.