Slice potatoes and layer in a rectangular Pyrex dish. Melt margarine; add onions. Add flour, stirring constantly until mixture starts to thicken. Gradually add milk, then cheese. Lift potatoes with a fork and pour mixture over and under sliced potatoes. Use enough cheese mixture to cover potatoes. Place pimento slices on top. Sprinkle with paprika. Bake at 350 degrees for 30 min.
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