Preheat the oven to 350°F (175°C). Prepare a 9x9-inch baking dish by coating it with non-stick spray.
In a large skillet over medium heat, cook the ground beef, breaking it apart as it browns. Once fully cooked, drain any excess grease.
Add the taco seasoning and water to the skillet with the beef. Cook for about 2 minutes, allowing the flavors to meld.
In a medium mixing bowl, combine the Ro*Tel diced tomatoes, Nacho Cheese Soup, and sour cream. Stir in the seasoned beef mixture until thoroughly mixed.
Place three tortillas at the base of the prepared baking dish. Spread one-third of the beef mixture over the tortillas.
Continue layering with the remaining tortillas and meat mixture, finishing with a final layer of tortillas on top. Evenly sprinkle the grated cheddar cheese over the top layer.
Bake in the preheated oven for 20 minutes, or until the dish is hot and the cheese is melted and bubbly.
Garnish with chopped cilantro, guacamole, and additional sour cream, as desired. Serve immediately and enjoy.