In a large saucepan, bring water to a boil. Stir in grits and salt. Reduce heat; cover and simmer for 5-7 minutes or until thickened. Cool slightly. Gradually whisk in the milk, butter and eggs. Stir in cheese, Worcestershire sauce and cayenne.
Transfer to a greased 2-quart baking dish. Sprinkle with the paprika. Bake, uncovered, at 350 degrees for 30-35 minutes or until bubbly. Let stand 10 minutes before serving.
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