01 - In a medium saucepan over medium heat, melt the butter. Whisk in the flour and cook for 1 minute until bubbling but not browned.
02 - Slowly pour in the milk, whisking constantly to remove lumps. Continue cooking and whisking until the mixture thickens, about 3–4 minutes.
03 - Reduce heat to low. Stir in the cream cheese until fully melted and incorporated into the sauce.
04 - Add shredded cheddar and mozzarella cheeses, stirring until smooth and fully melted. The mixture should be glossy and thick.
05 - Mix in garlic powder, onion powder, smoked paprika, salt, black pepper, and Dijon mustard until well combined.
06 - Remove from heat and serve immediately with warm pretzels for optimal texture and flavor.