In a small saucepan, over low heat, heat milk. Stir in cocoa mixed with milk, sugar and continue to stir until cocoa is incorporated and sugar is dissolved. Do not bring mixture to a boil. Off heat add peppermint Schnapps. Pour hot chocolate into 4 mugs. Top with whipped cream, grated chocolate and add 1 candy cane per mug.
Recipe courtesy of Amy Stevenson and Lynn Kearney of Food Network Kitchens