Saute onions in olive oil until soft.
Add garlic and saute for 2 minutes more.
Add mushrooms and butter. Saute until mushrooms give up their juice.
Add sherry and saute onions and mushrooms for another 5 minutes. They should be slightly caramelized.
Add milk, stir, and cook until warm. Remove from heat.
Pre-heat oven to 400 degrees.
Place pork chops in a casserole dish.
Sprinkle with paprika, salt, pepper and, if using, cayenne.
Spread sauerkraut over chops.
Slowly pour onion-mushroom mixture over chops and sauerkraut.
Bake in oven for 45 minutes.
Remove from oven and let rest for 5 minutes.
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