Begin by cutting your day-old bread into 1-inch cubes, ensuring they maintain their structure. If using fresh bread, toast it in a preheated oven at 300°F for about 10-15 minutes.

In a large skillet, cook your breakfast sausage over medium heat for about 8-10 minutes or until it’s nicely browned, breaking it apart with a spatula as it cooks. Drain excess grease while leaving about a tablespoon in the skillet.

Add the chopped onion to the skillet and sauté for 5-7 minutes until translucent. If using, add red bell pepper during the last 3-4 minutes of cooking.

In a large mixing bowl, gently combine the cubed bread, cooked sausage mixture, and the shredded cheeses, ensuring everything is evenly distributed.

In another bowl, whisk together the eggs, milk, dry mustard powder, salt, black pepper, and cayenne pepper until frothy.

Pour the egg custard evenly over the bread and sausage mixture, pressing down gently. Cover with plastic wrap and refrigerate overnight.

Preheat oven to 350°F. Bake uncovered for 45-55 minutes until puffed and golden brown, and a knife inserted in the center comes out mostly clean.

Let the casserole rest for 10-15 minutes before serving for better layering and flavor melding.