In ovenproof 12-inch skillet, heat 1 tablespoon butter over medium-high heat. Add chorizo; cook 7 to 8 minutes, stirring frequently, until no longer pink. Sprinkle with flour; cook and stir 1 to 2 minutes. Stir in 3 cups milk, the tomatoes and green chiles. Heat to simmering; simmer 2 to 3 minutes or until slightly thickened. Add Kraft™ Velveeta™ cheese; stir until melted. Remove from heat; stir in shredded Cheddar cheese.