Stir together the cheese cubes, milk and water into a large microwave safe bowl. Microwave on high for 5 minutes, stopping to stir after every minute. The mixture might seem watery during the first few stirs, but should come together as a nice runny dip after all the cheese is melted. Remove from the microwave and stir in the rest of the ingredients.
Serve immediately as a dip with tortilla chips or as a sauce over your favorite Mexican dish. If using for a party dip, transfer to a small Crock Pot on the warm setting.
*Recipe Note: White American cheese is found at most deli counters in your local grocery store. Land o' Lakes is my preferred brand, however, I have had great results with Boar's Head, too.
*Reheat Instructions: Store any leftover cheese dip in the fridge. Reheat in the microwave, stirring every 30 seconds until creamy and hot.