01 - Melt butter in a medium saucepan over medium heat. Whisk in flour and cook for 1 minute until bubbling but not browned, creating a smooth roux.
02 - Slowly pour in milk while whisking constantly to eliminate lumps. Continue cooking and whisking until mixture thickens, approximately 3–4 minutes.
03 - Reduce heat to low. Stir in cubed cream cheese until completely melted and incorporated into the sauce.
04 - Add shredded sharp cheddar and mozzarella cheeses. Stir continuously until fully melted and mixture becomes smooth and creamy.
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.