While we bake the bagels, we will prepare the sauce.
Melt the butter in a saucepan. Add cornstarch, mix thoroughly and cook for one minute.
Add the chicken broth and whisk until smooth.
Cook the sauce over low heat, stirring constantly, until thickened.
In a separate saucepan, heat 1 cup of milk. The milk should be hot.
Add hot milk to the sauce. Stir and add half a cup of sour cream. Stir again.
Grate the cheddar cheese on a fine grater. Add to the sauce and mix thoroughly. Add sugar and salt to taste. Cook the sauce over low heat until the cheese melts.
The sauce is ready.