Line a 9x9 inch baking dish with parchment paper, leaving some overhang for easy removal later.

In a medium saucepan over low heat, combine the sweetened condensed milk, chocolate chips, and butter.

Stir continuously until everything is melted and smooth; this prevents burning.

Remove the saucepan from heat and stir in the vanilla extract.

If using nuts, fold them into the melted chocolate mixture.

Pour the fudge mixture into the prepared baking dish and spread it evenly.

Place the dish in the refrigerator for at least 2 hours or until set.

Once chilled, lift the fudge out using the parchment paper and cut into squares.