Combine the processed cheese, Cheddar, Monterey Jack and mozzarella in a medium bowl. Set aside.
Heat the oil in a medium saucepan over medium heat. Add the sausage and cook, breaking into very small pieces with a wooden spoon, until browned and cooked through, about 5 minutes. Transfer the sausage with a slotted spoon to a plate. Leave the drippings in the pan. Add the jalapeno to the drippings and continue to cook, stirring, until has soft, about 2 minutes. Sprinkle the flour into the pan and cook, stirring until lightly toasted, 1 to 2 minutes. Add the chili powder and cumin and stir until well incorporated to the flour mixture, about 30 seconds longer. Slowly pour in the milk and cook, whisking frequently, until smooth and slightly thickened, about 5 minutes. Add the cheese mix a handful at a time. Cook, whisking until smooth. You can add the next handful once the previous handful has melted about halfway. Remove from the heat and stir in the browned sausage, pico de gallo and 1/2 teaspoon salt. Taste and adjust the seasonings and heat with additional salt and hot sauce. Serve warm with chips for dipping and extra pico de gallo on the side.
Inspired by Queso and Chips from The Mont for Cooking Channel