Cheesy Scalloped Potatoes

1/2 cup chopped onion (1 medium)
1 clove garlic, minced
2 Tablespoons butter
2 Tablespoons flour
1/4 teaspoon pepper
dash salt
1 1/4 cups milk
3/4 cup velveeta
3 slices cooked, crumbled bacon or ham (optional)
3 medium potatoes (1 lb.)

Grease a 1/12 quart casserole; set aside. For sauce,in a small saucepan cook onion and garlic in butter till tender but not brown. Stir in flour, pepper and salt. Add milk all at once. Cook and stir over medium heat till thickened and bubbly. Thinly slice potatoes. Place half the sliced potatoes in the prepared casserole. Cover with half of the sauce and all of the bacon or ham (if using). Repeat potato and sauce layers. Bake, covered, in a 350 degree oven for 40 minutes. Uncover and bake about 30 minutes more or till potatoes are tender. Serves 4 to 6.