Preheat oven to 350 degrees F. Grease a 3-quart rectangular baking dish; set aside.
In a large skillet cook sweet pepper and onion in hot butter about 4 minutes or until tender. Stir in flour. Cook and stir for 1 minute. Stir in half-and-half and cheese. Cook and stir until cheese melts. Stir in ancho chile pepper, cumin, and black pepper. Stir in potatoes. Transfer to prepared baking dish. Cover with foil.
Bake for 45 minutes, stirring twice. Uncover and bake about 10 minutes more or until potatoes are tender when pierced with a fork and liquid is absorbed. Top with tortilla chips and, if desired, jalapeno slices.