Every year, my best friend and I get together to do our holiday baking together. We found a new recipe to try one year, and it turned out so fantastic (we both loved it), so we now make this every year. It's quick to fix (only about 15-20 minutes) and it's very easy, as candy-making goes. The cooking time listed below is the minimum chilling time needed for the fudge to "set" well enough to cut into individual serving pieces.
Line an 8x8-inch square baking pan with aluminum foil. Lightly coat the bottom of the foil with butter. Set baking pan aside.
In a medium size saucepan, combine the vanilla chips and the sweetened condensed milk. Cook over medium heat, stirring frequently, until the vanilla chips are melted.
Remove the pan from the heat and continue to stir (to remove any lumps that might be left from partially un-melted chips).
When chips are completely melted, stir in the peppermint extract and crushed candy canes. Spread the fudge mixture evenly in the bottom of the prepared baking pan.
Dot the top of the fudge with several drops of food coloring. With a butter knife, cut through the fudge and food coloring, making a swirling pattern throughout the fudge. (NOTE: I used about 9 drops of food coloring. But feel free to reduce or increase that, depending on the amount of swirling you wish in your fudge).
Chill for 2 hours. Remove the fudge from the baking pan by lifting the foil from both ends. Transfer fudge to cutting board, and cut into 1-inch squares.