Line an 8×8 inch square baking pan with parchment paper, making sure to leave a little overhang on the sides. This creates a sling that allows you to lift the fudge out easily once it has fully set. Lightly grease the parchment paper with a tiny bit of butter to ensure nothing sticks.
In a medium heavy-bottomed saucepan, combine the chocolate chips, sweetened condensed milk, and cubed butter. Place the pan over low heat and stir constantly with a silicone spatula. It is important to keep the heat low so the chocolate does not scorch or become grainy. Continue stirring until the mixture is completely smooth and glossy.
Remove the saucepan from the heat immediately. Stir in the alcohol-free vanilla extract, peppermint extract, and sea salt. The salt is a secret ingredient that cuts through the sweetness and enhances the chocolate notes. Stir well to ensure the extracts are evenly distributed throughout the fudge base.
Allow the mixture to cool for about two minutes so the marshmallows do not melt instantly. Gently fold in half of the mini marshmallows. You want them to stay mostly intact to mimic the look of a cup of hot cocoa. Pour the mixture into your prepared baking pan and smooth the top with your spatula.
While the fudge is still warm, press the remaining mini marshmallows and the crushed candy canes into the top. Press down gently so they adhere to the fudge. Place the pan in the refrigerator and let it chill for at least three to four hours, or until it is completely firm to the touch.
Once set, use the parchment paper overhang to lift the fudge block onto a cutting board. Use a sharp knife dipped in hot water and wiped dry to cut the fudge into small squares. This technique ensures clean, professional looking edges for every piece.
