In a pot, bring the rice and water to a boil. Cover, reduce heat to low, and simmer 20 minutes.
Preheat oven to 350 degrees F (175 degrees C). Lightly grease a medium baking dish.
In a bowl, mix the soup, milk, jalapeno peppers, salt, and pepper.
Melt the butter in a large skillet over medium-low heat, and cook the onion until tender. Mix in the cooked rice and spinach. Pour the soup mixture into the skillet, and continue cooking until heated through. Mix in the cubed processed cheese, and transfer to the prepared baking dish.
Bake 25 minutes in the preheated oven, until bubbly and lightly browned.