Preheat oven to 425°. In a large saucepan, saute onion in butter until tender. Add cream cheese and milk; stir until melted. Stir in 1 cup Parmesan cheese, cayenne, salt and pepper. Stir in spinach.
Transfer to a greased 1-1/2-qt. baking dish. Sprinkle with remaining Parmesan cheese. Bake, uncovered, 30-35 minutes or until hot and bubbly.
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We really enjoyed this easy side. It goes well with red meat or just to eat by itself.