Combine flour, powdered milk,sugar, yeast and salt in a large bowl. Add the butter and cheese. Mix with your hands.

Gradually add the water to the flour mixture and mix well. Knead on lightly floured surface until smooth and elastic, about 8 to 10 minutes. Cover and let rest about 45 minutes.

Form it into a log and place it in a greased 9" x 5" loaf pan. Cover loosely with greased plastic and let rise about 60 minutes. Towards the end of the rising time, preheat the oven to 350°F.

Bake the bread for 30 minutes or until it's golden brown. Remove the bread from the oven, let it cool in the pan for about 10 minutes, then transfer the loaf to a rack to cool completely before slicing.