First, coat a 8x8-in baking dish with butter and line it with parchment paper.

Next, use a heavy duty food processor, or a plastic bag and meat mallet, to crush the peppermint candies. Set them aside.

After that, in a large saucepan, heat the chocolate chips and sweetened condensed milk over low heat while stirring constantly. Keep stirring until all the chocolate has melted, then remove the pan from the heat.

Now, add the peppermint and vanilla extracts and mix everything together.

Then, pour the peppermint fudge into the baking dish and use a rubber spatula to smooth it out evenly.

Afterward, sprinkle on the crushed peppermint candies and gently press the pieces into the warm fudge.

Last, place the peppermint fudge into your fridge to chill and set for at least 2-hours. Alternatively, you can leave it on the counter for at least 4-hours to set at room temperature.