In a medium saucepan combine the chocolate pieces, sugar, and milk. Cook, stirring constantly, until chocolate is melted. Stir in the peanut butter. Cook and stir until heated through.
Pour mixture into a fondue pot; place over fondue burner set on low. Serve with cake cubes, fruit dippers, and/or marshmallows. Makes 8 (1/4-cup) servings.