Remove the seeds and membrane from one jalapeño, then dice it into small pieces. Slice the second jalapeño into thin rings and set aside for topping the bread.
In a large mixing bowl, combine the all-purpose flour, kosher salt, 2 cups of shredded cheddar cheese, and diced jalapeño. Stir until evenly combined.
In a separate large mixing bowl, combine the warm water and instant yeast. Stir gently and let the mixture sit for 3 minutes.
Add the dry ingredient mixture to the water and yeast. Stir until thoroughly combined. The dough will be very sticky.
Using a sturdy spatula, gently knead the dough by folding it over itself approximately 15 times inside the bowl.
Cover the bowl tightly with plastic wrap and let the dough rise in a warm place for 1 hour.
Remove the plastic wrap and fold the dough over itself another 15 times. Cover the bowl again and let the dough rise for an additional 30–40 minutes.
While the dough completes its second rise, preheat the oven to 450°F. Place the Dutch oven and its lid inside the oven to preheat.
Cut a piece of parchment paper large enough to cover the bottom and extend up the sides of the Dutch oven.
Lightly flour your work surface and hands. Turn the dough onto the floured surface and gently shape it into a round or oval loaf.
Place the shaped dough in the center of the parchment paper. Carefully use the parchment paper to lower the dough into the hot Dutch oven.
Arrange the sliced jalapeño rings over the top of the dough. Sprinkle with the remaining ¼ cup of shredded cheddar cheese.
Cover the Dutch oven and bake for 30 minutes.
Carefully remove the lid and continue baking uncovered for an additional 20 minutes, or until the crust is deeply golden brown.
Remove the Dutch oven from the oven. Carefully lift the bread out using the parchment paper.
Remove the parchment paper and place the bread on a wire cooling rack. Allow it to cool completely before slicing and serving.