Grate the cheddar cheese while very chilled.

Let the grated cheese get back to room temperature.

In the bowl of a food processor, combine the cheese, softened butter, Dijon mustard, sherry, and cayenne pepper.

Whirl the ingredients until smooth and creamy.

Transfer the mixture to a mixing bowl.

Cover the bowl and refrigerate for at least one hour, or up to 2 weeks.

Remove from refrigerator 1 hour before serving.

Fold in the chopped toasted pecans.

Repack the dip into four 1-cup ramekins or crocks.

Dust with finely sliced chives for garnish.

Serve with crackers, celery, fennel, or jicama.