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In a medium saucepan, melt the butter over medium heat.
Whisk in the flour and cook for about 1 minute, stirring constantly, to create a roux. This will help thicken the sauce.
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Gradually add the milk to the roux, whisking continuously to prevent any lumps from forming. Cook for about 5 minutes, or until the mixture has thickened.
Reduce the heat to low and add the grated cheddar cheese to the saucepan. Stir until the cheese is completely melted and the sauce is smooth.
Stir in the salt, paprika, cayenne pepper, and garlic powder. Adjust the seasonings to taste, adding more cayenne if you prefer it spicier.
Remove from heat. The sauce will continue to thicken as it cools.
