1. Prepare Grits Crust: Bring milk and 1 cup water to a boil in a large saucepan over medium heat; add grits, and cook, stirring often, 5 minutes or until thickened. Stir in cheese and next 3 ingredients; remove from heat.
2. Gradually stir about one-fourth of hot grits mixture into eggs; add egg mixture to remaining hot grits mixture, stirring until blended.
3. Prepare Sausage Filling: Preheat oven to 375°. Cook sausage in hot oil in a Dutch oven over medium heat 7 to 8 minutes on each side or until browned. Remove sausage from Dutch oven, reserving 1 Tbsp. drippings in Dutch oven.
4. Sauté bell peppers and onion in hot drippings 5 minutes or until tender. Add garlic, and sauté 2 minutes. Cut sausage into 1/2-inch-thick slices. Stir together tomatoes, bell pepper mixture, and sausage in a large bowl.
5. Melt butter in Dutch oven over medium heat; whisk in flour, and cook, whisking constantly, 4 to 5 minutes or until smooth and medium brown. Gradually whisk in broth, and bring to a boil, whisking constantly.
6. Reduce heat to medium-low; simmer, stirring occasionally, 5 minutes or until thickened. Stir in jelly and next 3 ingredients. Stir into sausage mixture, and spoon into a lightly greased 11- x 7-inch baking dish. Gently spread Cheese Grits Crust over top.
7. Bake at 375° for 20 to 25 minutes or until lightly browned. Let casserole stand 10 minutes before serving.