Red Onion Marmalade: Heat olive oil and butter in a skillet over medium-high heat. Add half the onions and stir to coat with oil. Cook until slightly softened, 2-3 minutes. Add the remaining onions and stir to combine Cook, stirring often, until onions are softened, about 10 minutes.
Sprinkle with thyme. Stir in wine and bring to a boil. Lower heat and simmer until onions are very tender and wine has evaporated. Add honey and balsamic vinegar and cook over medium heat, stirring regularly, until any remaining liquid and evaporated and onions are dark and sticky. Let cool to room temperature and use immediately, or store in a covered jar in the fridge for up to 3 weeks. (Makes 1 cup)
For the grilled cheese: Cook bacon to crisp and set on to a paper towel. Cut bread slices and grate cheese. Heat large skillet over medium-low heat. Butter outside of bread slices. Carefully place a piece of bread buttered side down on top of a butter-knife blade (stops the butter from sticking to the surface and makes it easier to move to the skillet). Add a layer of grated cheddar. Top with a layer of cheese curds. Place a couple of slices of the bacon on top, then finish with a generous layer of red onion marmalade. Top with other slice of bread, buttered side up. Repeat with more sandwiches, as needed. Transfer to warm skillet and cook on both sides until deep golden brown.
(Note: cheese curds don't melt easily. Always start with room temperature curds and you can aid the process by placing a baking sheet over the top of the skillet to cover for a bit, to build up the heat in the skillet and aid the melting. If all else fails, after your sandwich is golden, place sandwich on a plate and microwave for 20-30 seconds, or until curds melt. Don't worry, it will still be crispy!)
Notes
Be sure to read the notes above this Recipe Card, for more tips on making this recipe.