Melt butter in a small heavy bottom dutch oven on medium heat. Once melted, whisk in flour until smooth and creamy.
Slowly add in milk to flour/butter mixture, whisking often. Heat and whisk for 3-5 minutes or until mixture has begun to bubble, thickened and can coat the back of a wooden spoon.
Whisk in chili powder, garlic powder, salt and shredded cheese until smooth and creamy. Serve from the small Dutch oven to keep queso warm. If queso begins to thicken while serving, reheat with a few tablespoons of milk whisked into mixture.