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Step 1
Melt the butter in a medium saucepan over medium heat. Add the flour and cook, whisking constantly, for about 1 minute. Add the half & half and whisk until evenly combined. Bring to a simmer and cook until thickened, a few minutes. Turn the heat down to low and gradually add the grated cheese, whisking and letting it melt as you go, until all of the cheese is incorporated. Stir in the salt, chili powder, cayenne pepper, cumin, garlic powder, onion powder, diced tomatoes and green chilies, and cilantro (if using). The mixture may seem a bit thick at first, but it will thin out slightly as the tomatoes and peppers release their juices. Taste and adjust seasoning if necessary; for more heat, add more cayenne pepper. If the dip seems too thick, you can thin it out with a bit more half & half or some milk. Transfer the queso to a bowl and serve warm with tortilla chips. If the dip cools while you're serving it, you can reheat it in the microwave; just stop and stir at short intervals so it reheats evenly.
Step 2
Make-Ahead Instructions: The queso can be made up to 3 days ahead of time and reheated on the stovetop. If it's too thick, add a bit of half and half or milk to thin it out.
Step 3
Note: I developed this recipe using pre-shredded cheese from a bag for ease and convenience, as it saves the effort of grating cheese by hand. An important aspect to note is that pre-shredded cheese is coated with anti-caking agents to prevent clumping, which incidentally aids in thickening the queso, resulting in a perfectly smooth and creamy texture ideal for dipping. Should you choose to grate the cheese yourself, I recommend increasing the butter and flour in the recipe to 3 tablespoons each. This adjustment compensates for the lack of anti-caking agents in freshly shredded cheese, ensuring your queso still achieves that wonderfully rich and creamy consistency.