If using frozen spinach, thaw it completely and squeeze out all excess moisture using a clean kitchen towel or cheesecloth—this is crucial for preventing a watery dip. While the spinach drains, measure out all remaining ingredients and have them ready. I like to soften the cream cheese at room temperature for 15-20 minutes so it blends smoothly without lumps into the final mixture.

In a medium saucepan over medium heat, combine the American cheese, softened cream cheese, and milk. Stir frequently as the cheeses melt together—this takes about 5-7 minutes. The mixture should be smooth and pourable. Stir in the garlic powder until fully incorporated, ensuring no lumps remain in the sauce.

Add the diced tomatoes and chilies directly to the melted cheese mixture from Step 2, stirring to combine. Fold in the prepared spinach from Step 1 until evenly distributed throughout the sauce. Sprinkle in the cayenne pepper and ground cumin, stirring well to ensure all spices are evenly distributed and no dry pockets remain. Taste and adjust seasonings if needed—I find the dip benefits from a light touch with cayenne, as it can become spicy quickly.

Transfer the warm dip to a serving bowl and garnish with the fresh cilantro. Serve immediately with sturdy restaurant-style chips for dipping. The dip will thicken slightly as it cools, so if you need to keep it warm for an extended time, transfer it to a slow cooker on the warm setting to prevent scorching on the bottom.