Melt butter in a medium saucepan over medium heat.
Add minced garlic, jalapeno, and onion; cook until softened, about 5 minutes.
Stir in chili powder, cumin, onion powder, and salt. Cook for 1 minute more.
Add evaporated milk and hot sauce; bring to a simmer.
Reduce heat to low and stir in cream cheese until melted and smooth.
Add cheddar, Monterey Jack, and milk; stir until cheese is melted and the dip is creamy. Stir in pico de gallo.
Serve warm with tortilla chips or vegetables.