Prepare the pan: Line an 8x8-inch baking pan with parchment paper, leaving some overhang for easy removal later. Lightly grease the parchment paper with butter.

Combine sugar, butter, and milk: In a medium saucepan, combine the sugar, butter, and evaporated milk. Stir over medium heat until the butter melts and the sugar dissolves.

Bring to a boil: Once the mixture is smooth, bring it to a full rolling boil while stirring constantly. Boil for exactly 5 minutes to reach the soft-ball stage (234°F on a candy thermometer).

Remove from heat: After 5 minutes, remove the saucepan from the heat and immediately stir in the chocolate chips until fully melted and smooth.

Add marshmallow and vanilla: Stir in the marshmallow creme and vanilla extract until fully incorporated. If using nuts, fold them in at this stage.

Pour into the pan: Quickly pour the fudge mixture into the prepared pan, spreading it evenly with a spatula. Let it cool at room temperature for at least 2 hours or until set.

Cut and serve: Once fully set, lift the fudge out of the pan using the parchment paper overhang. Cut into small squares and serve.