Bring milk and butter to a boil in a sauce pan on top of the stove on medium heat.  Stirring constantly with a wire whisk add grits a little at a time to keep them from clumping.  Turn heat down to a low simmer, cover pot and cook five to six minutes until grits thicken.

Remove and stir in cheddar cheese and cream cheese until cheese melts.  Add salt, black pepper, drained diced pimentos and garlic powder.  Garnish with chopped green onions and sprinkle on some smoked paprika.