Preheat oven to 375°F. Butter a 2 to 2½-quart baking dish and set aside.
Bring a large pot of salted water to a boil. Add pasta and cook for 2 minutes less than the package instructs. Drain, toss with 1 Tablespoon Challenge Spreadable Butter and set aside.
Melt 4 tablespoons Challenge Lactose Free Butter in a large saucepan over medium heat. Add jalapeños and cook for 2 minutes. Stir in flour and cook for 1 minute. Slowly add milk, whisking constantly, until completely smooth. Bring to a boil, reduce to a simmer and cook, whisking often, until thickened, 8-10 minutes.
Stir in cream cheese, ¾ teaspoon salt, and pepper and whisk until smooth and melted. Whisk in cheddar cheese, a handful at a time, until melted and smooth. Remove from heat, add pasta, and toss to coat.
Pour the pasta into the prepared baking dish; set aside while you make the breadcrumbs.
Melt remaining 1 Tablespoon Challenge Lactose Free Butter in a medium skillet over medium heat. Add panko and garlic powder and cook, stirring, until golden and crispy, 8-10 minutes. Sprinkle evenly over the mac and cheese.
Bake for 25-30 minutes or until golden brown and bubbling. Top with bacon crumbles and sliced jalapeños, if desired. Serve hot.