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1. In a medium heavy saucepan combine white chocolate and 1/3 cup of the milk. Cook and stir over low heat until chocolate is melted. Add the remaining 1 2/3 cups milk. Cook and stir over medium heat until heated through. Stir in coffee and vanilla.
2. Serve in latte mugs or bowls. If desired, top with ice cream and sprinkle with nutmeg.