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Heat the oven to 350 degrees F. Cut 1-inch holes out of the bottom of a large inverted foil roasting pan in neat rows, leaving 1 to 2 inches in between the holes. Invert the pan and place paper cooler cups in the holes to hold them upright during baking.
Sift together the 3 cups sugar, flour, cocoa, baking powder, baking soda, and salt. Transfer to a mixer fitted with a whisk attachment (or use a hand mixer) and blend briefly. Whisk together the eggs, milk, oil, and vanilla extract in a medium bowl. Add to the dry ingredients and mix at low speed for 5 minutes. Gradually add the hot water, mixing at low speed just until combined. The batter will be quite thin.
Pour the batter into the cups. Bake until a tester inserted in the center of the cake comes out clean (a few crumbs are okay) and the center feels firm to the touch, 25 to 30 minutes. Let cool in the pan. Chill for 2 hours then peel off the paper being careful not to tear off the tip of the peak.
Place cakes on a rack over a sheet pan lined with parchment paper and with a fork drizzle both colors of chocolate then stick on M & M's and silver dragee to look like ornaments on a little Xmas tree.
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