Cut cheese into bite-sized chunks, and put in a microwave safe bowl.
Add water and milk, and stir. Microwave for one minute, and then remove and stir.
Continue microwaving (stirring every minute) until cheese reaches desired consistency (approximately 4-6 minutes).
Serve as a dip with tortilla chips or drizzled over Mexican dishes.
Dip can be refrigerated and reheated, but be careful not to burn it.