01 - Melt butter in a medium saucepan over medium heat. Whisk in flour and cook for 1 minute until bubbling but not browned.
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 cream cheese cubes until completely melted and smooth.
04 - Gradually add shredded cheddar and mozzarella cheeses, stirring constantly until fully melted and sauce is velvety smooth.
05 - Mix in garlic powder, onion powder, smoked paprika, salt, black pepper, and Dijon mustard until well combined. Remove from heat.
06 - Transfer to serving bowl and enjoy with warm pretzels while hot.