Warm butter in a large saucepan and saute the onion until tender.
Stir in potatoes, cider, thyme, salt, and cayenne pepper. Bring to a boil. Reduce heat, cover and simmer for 15 minutes
Add chopped apple; simmer, covered, 5 minutes or until potatoes are tender.
In a small bowl, combine the milk and flour; stir into soup. Cook and stir until bubbly.
Slowly add cheese, whisking until cheese is melted.
Divide soup among serving dishes; top with apple slices, peppercorns, crumbled croutons, and bacon bits