Heat a heavy-bottomed medium size pot or deep skillet over medium heat. Melt the butter in the pot and add the onions, raising the heat slightly. Add the bay leaf, thyme, salt and pepper to the onions and cook, stirring occasionally, until the onions are soft and caramel in color, 20 minutes.
While the onions cook, slice the apples and douse with a little lemon juice to slow their browning. Arrange the apples and bread on a board or platter.
When the onions are soft and sweet, add the flour and cook for 1 minute. Whisk in the wine, cook for a minute, then whisk in the half-and-half. When the liquid comes up to a bubble, season with nutmeg and cloves and adjust the salt and pepper, to taste. Stir in the cheddar and melt, then remove from the heat and serve in a fondue pot or transfer to a small, warmed saucepot – you can return the saucepot to the stove to reheat the sauce as necessary. Dip the apples and bread in the warm cheesy sauce and enjoy.