In a small bowl or custard cup, combine the warm water and the yeast and let stand until foamy.
In the bowl of a stand mixer, combine the flour, sugar, cocoa powder, salt and espresso powder (if using). Mix very well with a spoon or with the paddle attachment of a stand mixer.
In a large saucepan, melt the butter and the chocolate together over low heat. Remove from heat briefly and mix in the cottage cheese and egg until blended. Return to stove and heat over low just until warm.
Add the activated yeast and the warm cottage cheese mixture (and vanilla, if using) to the dry mixture. Use the paddle attachment or a spoon to mix. The dough will look speckly from the cheese curds and dry. It will soften as you knead.
Switch to the dough hook and let the machine knead the mixture until it forms a slightly dough. Add a little water if needed water if it feels to dry, but continue kneading. Knead for 5 minutes or until dough has some elasticity to it and is not too sticky. You may need to scrape it from the sides of the bowl.
Cover the bowl and let the dough rise for 30 minutes or an hour if using active dry yeast. It will not double.
Work in the chocolate chips, nuts and dried cherries (if using). Shape into one large round or two small rounds (I recommend two). As you form the rounds, try to keep the chocolate chips buried in the dough or set aside a little of the dough to patch the exposed ones and keep them from drying out in the oven.
Set your dough rounds on a piece of parchment. Cover with greased plastic wrap and let rise for about 60-75 minutes. It will not double during the rise, but it will puff up substantially.
Preheat the oven to 350 degrees F. Bake the bread on the center rack for about 45 minutes (for small loaves) and 60 minutes for one large loaf, shielding with foil the last 20. If you have an instant read meat thermometer, bread is usually done when it's a little over 200. I try to bake mine to 205 F.
If you'd like, you can lay some chocolate disks or pieces on the hot loaves and let them melt into the top as the bread cools.
Let cool for at least an hour, preferably longer. Slice and serve, or wrap it in plastic and freeze.
Notes
For the butter, use 2 tablespoons for a lighter textured bread and 4 for a richer, denser, heavier (more cake-like) bread. I like the bread better with less butter.