Add the frosted animal crackers to a food processor and pulse until fine crumbs form. You want them crushed well so they blend evenly into the dip without large chunks.

In a mixing bowl, beat the softened cream cheese and marshmallow cream together until smooth. Make sure the cream cheese is fully softened or the dip will stay stiff and harder to mix. Fold the crushed animal cracker crumbs into the mixture using a spatula until evenly combined. The dip will take on a pale pink color as the crumbs blend in.

Spoon the dip into a serving bowl and you can serve it right away. If you want a firmer texture, cover and refrigerate for about 30 minutes before serving. Just before serving, top with a few whole animal crackers and rainbow sprinkles if using.

If the dip has been refrigerated, let it sit out for about 20 minutes before serving so it softens slightly and is easier to dip.