In a medium saucepan, heat 2 cups of water. This will function as the botton half of a double-broiler.

Select a bowl to sit atop the saucepan for the top half of the double boiler. The water level of the saucepan should be just below the bottom of the bowl. Adjust the water level.

Add chopped chocolate to the double boiler and heat until melted (alternatively, you could use chocolate chips).

In a separate saucepan heat the milk and half-and-half over medium heat to just below the simmering point. Do not allow the milk to come to a boil.

Remove the milk from the heat and stir in the melted chocolate.

When mixture is smooth, add sugar and vanilla extract. Whisk vigorously.

Reheat gently and serce immediately. It will harden pretty quick.

Garnish with marshmallows if desired.