3/4 cup water
1/2 cup chopped, peeled potato
1/3 cup milk
1/3 cup shredded cheddar cheese
2 teaspoons margarine or butter
3 cups bread flour
1 tablespoon sugar
3/4 teaspoon onion salt
1/4 teaspoon caraway seed -- crushed, optional
1 teaspoon active dry yeast or bread machine yeast

Select loaf size. In a small saucepan, combine the water and potatos. Bring to boiling; reduce heat. Cover and simmer about 10 minutes or until potato is very tender. Do not drain. Mash potato in the water. Measure potato-water mixture. If necessary, add water to equal 3/4 cup mixture for the 1-1/2 pound loaf or 1 cup mixture for the 2 pound loaf; discard any excess mixture. Cool slightly. Add the potato mixture and remaining ingredients to the machine according to the manufacturer's directions. Select the basic white bread cycle.