Combine potatoes, onion and green pepper in bowl.

Cover with boiling water, and let set for 10 minutes to rehydrate.

In 10 inch non stick skillet saute potatoes, onion and green pepper in butter until tender. Sprinkle with ham.

In a bowl, beat eggs, milk, pepper and salt; add to the skillet.

As the eggs set, lift edges, letting uncooked portion flow underneath. When eggs are set, remove from the heat.

Sprinkle with cheddar cheese; fold omelet in half.

Cover for 1-2 minutes or until cheese is melted.