Gather all ingredients and equipment.
In a medium saucepan, combine the cubed Velveeta cheese and shredded cheddar cheese.
Add the can of diced tomatoes (with juices) to the cheese mixture.
Pour in the milk to help the cheese melt smoothly.
Sprinkle in the garlic powder, onion powder, and cayenne pepper if using.
Heat the mixture over medium heat, stirring frequently.
Continue stirring until the cheese is completely melted and the mixture is smooth.
Taste and adjust seasoning if necessary.
Once melted, remove from heat and transfer to a serving bowl.
Garnish with fresh cilantro and sliced jalapeños before serving.