Cooking with Claud: Cobblestone Cheese Bread

Here’s what you need:
2 cups of coarsely grated cheddar cheese, divided
1 ½ cups water
½ cup milk
5 cups bread flour
¼ cup sugar
2 tablespoons butter or margarine, melted and cooled
2 (1/4-ounce) packages active dry yeast
1 tablespoon salt