In a large cast iron skillet, warm the oil over medium high heat until it begins to shimmer. Add the chorizo and, using a wooden spoon, break up the sausage and cook, stirring, until golden brown, 5 to 8 minutes. Transfer the sausage to a colander or fine-mesh sieve. Using a paper towel, gently press the chorizo to release any excess oil, then set aside.
Reduce the heat to medium and add 1 tablespoon of the butter to the pan. Once melted, add the onion and serrano pepper and mix to combine until coated. Cook, stirring, until the onion is translucent, 5 to 6 minutes. Taste and add more serrano if you prefer.
Add the remaining 1 tablespoon butter, and as it melts, evenly sprinkle in the flour. Stir until the flour forms small balls, about 3 minutes, then slowly whisk in the evaporated milk.
Season with cumin, paprika, salt, and pepper ans whisk to incorporate. Whisk in the cheese, a little at a time, until the sauce is silky, 3 to 5 minutes. If the sauce is too thick, add more evaporated milk, 1 tablespoon at a time, until the mixture is the consistency of fondue cheese.
Reduce the heat to low and mix in the chorizo, followed by the lime juice. Keep on low until ready to serve.