1. Melt butter in a medium saucepan over medium heat; whisk in flour until smooth. Cook, whisking constantly, 1 minute. Gradually whisk in milk; bring to a boil, whisking constantly.
2. Reduce heat to low; whisk in paprika and salt. Gradually add cheeses, whisking until smooth after each addition. Remove from heat; whisk in pimiento and next 3 ingredients. Transfer to a fondue pot or slow cooker on WARM. Serve with toast points.
Note: To make ahead, refrigerate fondue in an airtight container up to 3 days. Reheat in a saucepan, slow cooker, or fondue pot.