In a 1 quart glass bowl, stir sugar and cornstarch together. Gradually add enough of the milk to make a smooth paste. Stir in remainder of the milk. Microwave, uncovered, on high for 4 1/2 to 5 1/2 minutes, or until sauce is bubbly and thickened, stirring twice.
Stir in butter and vanilla extract. Serve warm or chilled over cake or fruit.