In a large pot, cook chopped bacon over medium heat until crispy. Remove bacon with a slotted spoon to a paper towel-lined plate, leaving the bacon fat in the pot.

Add diced red onion and diced jalapeños to the bacon fat. Sauté for 5-7 minutes until softened. Add minced garlic and cook for 1 more minute until fragrant.

Sprinkle flour over the vegetable mixture and whisk constantly for 1-2 minutes to cook out the raw flour taste.

Gradually pour in the chicken broth, whisking continuously to prevent lumps. Bring to a gentle simmer and cook for 10 minutes until slightly thickened.

Reduce heat to low. Whisk in the softened cream cheese until completely melted and smooth. Stir in the heavy cream.

Gradually add the freshly grated cheddar and pepper jack cheeses, a handful at a time, stirring until completely melted. Stir in half of the cooked bacon bits. Do not let the soup boil.

To make the dippers: Butter one side of each bread slice. Place two slices butter-side down in a skillet. Top with cheese, then place the remaining bread slices on top, butter-side up. Cook over medium-low heat until golden brown on both sides and cheese is melted. Slice into thick strips.

Ladle soup into bowls. Garnish with remaining bacon bits, extra sliced jalapeños, and fresh cilantro. Serve immediately with warm grilled cheese dippers.