1) In a saucepan or chafing diah, add in the condensed cream of mushroom soup along with the soup can milk.
2) Heat the soup till it thaws down.
3) Next, stir in the shredded cheese, chopped lobster, paprika and cayenne.
4) Heat the mixture until all the cheese has melted.
5) Next, pour in the sherry, if using.
6) To serve the Lobster Fondue as an appetizer, throw in large chunks of bread in it.
7) Lobster Fondue can also be served for lunch, by pouring over toasted bread spread with dill butter.