Preheat oven to 400ºF. In a medium bowl, combine the shredded oaxaca and monterey jack cheeses. Set aside.
Heat a large cast iron skillet over medium-high heat. Add the chorizo and crumble with a spoon, cooking for 5-7 minutes until the sausage has browned.
Transfer the cooked chorizo to a plate lined with paper towels and set aside.
Remove any excess fat left in the skillet from the chorizo and place the skillet back over medium-high heat.
Add olive oil, onions, and jalapenos. Saute for 6-8 minutes, stirring occasionally, until softened and translucent.
Remove the skillet from the heat and transfer the onions and peppers to a small bowl.
Assemble the queso fundido by adding ½ of the shredded cheese on the bottom of the skillet, followed by all of the chorizo, onions, and peppers, and then top with the remaining shredded cheese.
Place in the oven and bake until the cheese has completely melted, about 8-10 minutes.
Remove from the oven and top with diced tomatoes and chopped cilantro. Serve immediately.
Notes
Don't have cast iron? You can also make this dish in a regular baking dish. Follow the recipe instructions and then layer the queso fundido in a small baking dish or a pie plate.
Can’t find oaxaca cheese? You can use mozzarella, queso asadero, or queso chihuahua instead.
Though you can make the dish with all oaxaca or all monterey jack cheese, I prefer the flavor of 1/2 and 1/2.