Cheesy Au Gratin Potatoes

4 potatoes, sliced into 1/4" slices
1 onion, sliced into rings
salt and pepper to taste
3 T. butter
3 T. flour
1/2 tsp. salt
2 cups milk
1 1/2 cups cheddar cheese

Preheat oven to 400°. Butter a 1 quart casserole dish. Layer 1/2 of potatoes into bottom of prepared casserole dish. Top with onion slices, and add remaining potatoes. Season with salt and pepper to taste. In medium saucepan, melt butter over medium heat. Mix in flour and salt, and stir constantly for one minute. Stir in milk. Cook until mixture has thickened. Stir in cheese all at once, and continue stirring until melted, about 30-60 seconds. Pour cheese over potatoes, adn cover with foil. Bake 1 1/2 hours.