Bring 8-quart covered pot filled with water to boil over high heat. Once it boils, add handful of salt and pasta. Reduce heat to medium high and cook uncovered to al dente (has a bite to it). Drain and set aside.
Meanwhile warm a large 12-inch skillet over medium-high heat. Using clean kitchen shears, cut bacon into bite size pieces over skillet and let them to fall into pan. Stir occasionally as needed. Cook until crisp.
Once bacon is cooked through, remove from pan with slotted spoon and set aside. Reserve 2 tablespoons bacon drippings in small bowl. Wipe side of skillet to avoid flame ups.
Pour reserved bacon drippings back into skillet over medium heat and add butter. Once melted, add jalapeños and sauté until softened, 3-5 minutes. Add flour to skillet and whisk to combine. Add salt and cayenne pepper. Whisk to combine. Add cream cheese and stir until softened. Allow to come to bubble for 3 minutes, whisking occasionally to help pick up the bits on bottom of pan. Add milk. Whisk to combine. Bring back to bubble and add cheeses. Stir until cheese is melted and smooth.
Reserve 2 tablespoons bacon.
Add pasta to sauce and stir to combine. Add remaining bacon. Cook pasta in sauce for 5 minutes over medium heat until sauce thickens and the pasta has a chance to absorb some sauce.
Sprinkle with reserved bacon.