In a saute pan, brown onions in butter over medium high heat until golden brown, about 5 minutes.
To make the meatballs, combine sauteed onions, ground beef, egg, cracker crumbs, and green chile in large bowl. Use hands to thoroughly mix. Form into small balls about the size of a tablespoon and bake in preheated at 400 degree F oven for 20-25 minutes. For easier clean up, line baking sheet with parchment paper.
Meanwhile, make the white cheddar sauce by melting the butter in a medium saucepan over medium heat. Add the flour, stir, and allow to cook for 2-3 minutes until it starts to smell toasty. Whisky in the milk and continue to whisk until a smooth gravy forms after about 2 minutes. Turn off heat and stir in grated white cheddar.
If serving for dinner, broccoli is a great side dish and cheddar sauce can go on everything. If serving as game day grub, serve cheddar sauce on the side for dipping.
Makes about 4 dozen. Nutritional info based on 1 meatball with cheese sauce.