Chocolate:
Finely grate the chocolate.

In a saucepan, bring the milk to a boil with a bit of lemon peel and the cinnamon stick.

When it starts to boil, remove from heat and take out the cinnamon and lemon peel. Add the grated chocolate and chili pepper, stirring with a wooden spoon or spatula (never metal). Once the chocolate is melted, remove the chili pepper and return to the heat, stirring constantly and making sure it does not boil. Continue until you reach the desired thickness. (You can use cornstarch to thicken faster, but the result is better without it.)

Once thickened, add the butter and stir off the heat until fully melted.

Churros:
In a saucepan, combine 1/2 cup water, 1/2 cup milk, and a pinch of salt. Bring to a boil until the liquid rises. Add the flour, stirring vigorously until the dough is smooth and does not stick to the pan.

Remove from heat and add the egg white, mixing until the dough is smooth. Let it rest for a few minutes.

Place the dough in a piping bag or churro maker, and pipe churros of the desired size into hot oil. Fry until golden, then sprinkle with sugar and serve.

The whipped cream can be used to decorate the cups of hot chocolate if desired.