Drain the diced tomatoes with green chilies very well, pressing them gently against a fine-mesh strainer or cheesecloth to remove excess liquid. This prevents the finished queso from becoming watery or separated. Have all ingredients measured and ready before blending, as the actual mixing happens quickly.
Combine the cottage cheese, drained tomatoes with green chilies, taco seasoning, and nutritional yeast in a blender. Blend on high speed for 1-2 minutes, stopping to scrape down the sides as needed, until the mixture is completely smooth and creamy. I find that starting on medium speed and gradually increasing to high helps ensure the taco seasoning distributes evenly without clumping. The nutritional yeast will add a subtle savory, cheese-like flavor that complements the cottage cheese base beautifully.
Transfer the blended queso to a serving bowl. If you prefer it warm, microwave in 30-second intervals, stirring between each interval, until it reaches your desired temperature—usually 1-2 minutes total. The dip can also be served at room temperature or chilled, depending on your preference. I like to serve it warm for the best flavor and texture, as the heat brings out the savory notes from the nutritional yeast and taco seasoning.