In a saucepan combine milk, water, and sugar. Stir over medium heat until mixture just comes to boiling. Remove from heat. Stir in chocolate. Beat with an immersion blender, rotary mixer, or whisk until chocolate is melted and mixture is frothy.
To serve, pour hot chocolate into cups. If desired, top with Schlag, crushed English toffee, and cocoa powder. Makes 4 to 6 servings.
In a mixing bowl combine whipping cream, sugar, and vanilla extract. Beat until soft peaks form (tips curl).