In a saucepan over medium heat, melt the butter.

Whisk in the flour and cook for about 1 minute until bubbly.

Gradually add the milk, whisking continuously to avoid lumps.

Continue to cook until the mixture thickens, about 3-5 minutes.

Reduce heat to low and stir in the shredded cheddar cheese until melted and smooth.

Add garlic powder, onion powder, cayenne pepper, salt, and black pepper. Stir to combine.

Serve warm over nachos or as a dip.