Prepare all of your ingredients before you begin cooking.
In a 3-quart Dutch oven add the grits, water and 1/s tsp salt. Bring to a boil. Immediately remove from heat, cover and set aside for 15 minutes.
In a skillet over medium heat, add butter, olive oil, onion, and 1/2 tsp salt. Cook for about 5 minutes, add diced mushrooms, garlic, thyme, and crushed red pepper. Continue cooking for an additional 5 minutes. Stir in the Vermouth and cook for another 2-3 minutes.
Uncover and return the grits to a boil over medium-high heat, stirring with a whisk and scraping the bottom. Continue cooking the grits for about 20-25 minutes. The grits should be tender, but firm.
Stir in the butter, Parmesan cheese, milk, and mushroom mixture.
Serve.