In a large bowl, combine water, flour, yeast, sugar, and salt with a sturdy spatula. Mix until all the flour is incorporated and you are left with a shaggy dough.
Cover the bowl tightly with plastic wrap and place in a warm place to rise for an hour to an hour and a half, until dough has doubled in size.
Once dough has doubled in size, remove plastic wrap. Add in jalapenos and most of the cheddar cheese (leave a little for sprinkling over the top of the dough). Dump dough onto a floured surface.
Using stretching and folding motions, knead the bread, making sure to fully incorporate the cheese and jalapenos. Knead the dough until you are left with a nice, smooth ball of dough.
Transfer dough to a long piece of parchment paper and cover with a towel for another rise, about 20 minutes.
While the dough is rising, preheat the oven to 450 degrees F with your dutch oven on the top rack with the lid on.
Once the oven is preheated to 450 degrees F, remove the towel from the dough and score it with a razor blade. I normally do a curved line on one side of the dough. This allows heat and air to escape while baking.
Carefully transfer parchment with dough to the dutch oven, sprinkle with extra cheddar if desired, and place the lid back on top. Place the dutch oven in the preheated oven and bake for 30 minutes.
After 30 minutes, carefully remove the lid to the dutch oven and continue to bake for another 10-15 minutes. This second bake is to get the bread golden and crispy.
Once the second bake is done, carefully remove the dutch oven from the oven. Grabbing both ends of the parchment, gently lift and place parchment with baked bread on a wire rack to cool.
Make sure to allow the bread to cool before slicing.