Heat the oil in a 12-inch skillet over a moderate to high heat.
Add the ground beef and sprinkle the taco seasoning on top.
Cook for 2 minutes and then stir with a wooden spoon and cook until no pink remains in the meat.
Stir in the water, milk and tomatoes (not drained).
Bring to a simmer then add the macaroni and cover with a lid.
Simmer for 5 minutes, take the lid off and give the mixture a stir.
Cover and simmer for another 5 minutes.
Take off the lid, turn the heat right down to low and stir in the Velveeta cubes until melted.
Add the cheddar and stir until melted. Serve immediately.
Enjoy!