Add the water and milk to a pan with a lid and turn the heat to medium-high. While you're waiting for it to boil, dice the jalapeño, discarding most of the seeds. When the liquid boils, add the salt, sugar and then whisk the polenta into the water. Turn down the heat to medium-low and whisk for 2-3 minutes until it has thickened enough that the grits don't sink or separate from the water when you stop.

Cover and cook 30 minutes in low heat, stirring every 10 minutes or so. Around the 20 minute mark, add the jalapeños and butter. Stir into the mix, then cover and finish cooking.

To serve, you can scoop directly from the pan or spray a container with non-stick spray and scoop the polenta into it, letting it sit for 5-10 minutes until it takes on that shape. Flip it out onto a cutting board, cut into slices and serve.