Add the butter and flour to a small sauce pot. Heat and whisk the butter and flour together until they become bubbly and foamy.

Continue to cook and whisk the mixture for about 60 seconds.

Whisk in the milk and turn the heat up slightly until the milk comes to a simmer while whisking.

Once it reaches a simmer, allow the mixture to thicken enough to coat a spoon, then turn off the heat.

Stir in the shredded cheddar cheese, one handful at a time, until melted. If needed, place the pot over low flame to assist melting.

Stir in the salt and chili powder; taste and adjust seasoning as needed. Add milk if the sauce is too thick.

Serve over tortilla chips for nachos, as a dip with pretzels or veggies, or drizzle over baked potatoes.