Preheat oven to 375°F (190°C). Line two baking sheets with parchment paper.

In a large bowl, cream together the softened butter and freshly grated cheddar cheese until smooth and well combined.

Add the flour, salt, and cayenne pepper. Mix on low speed until a crumbly but cohesive dough forms.

Scoop tablespoons of dough and roll into balls. Place on baking sheet and press a thumb or teaspoon into the center to create a well.

Chill the shaped dough in the refrigerator for 20 minutes to prevent spreading.

Bake for 10-14 minutes until the edges are golden brown. Remove from oven.

While still warm, reshape the wells if needed, then fill each center with a teaspoon of pepper jelly.

Allow to cool on a wire rack and sprinkle with chopped chives before serving.