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 for 3-4 minutes until mixture thickens noticeably and coats the back of a spoon.
03 - Reduce heat to low. Add cubed cream cheese and stir continuously until completely melted and integrated into the sauce.
04 - Add shredded sharp cheddar and mozzarella cheeses gradually, stirring until each addition is fully melted. Continue until all cheese is incorporated and sauce is smooth and glossy.
05 - Mix in garlic powder, onion powder, smoked paprika, salt, black pepper, and Dijon mustard until evenly distributed. Remove from heat immediately and serve warm with soft pretzels.