1/2 cup evaporated milk
1 teaspoon vanilla extract
3/4 cup (smooth) peanut butter
In a medium sized saucepan (with a heavy bottom), mix 2 cups sugar and 1/2 cup evaporated milk. The heavy bottomed saucepan will keep this mixture from scorching.
Cook on medium high heat, stirring, until bubbles start to form around the edge of the pan. Turn the heat down to medium low and cook until the mixture starts to boil (bubbles all across the surface that don't go away when you stir it). Boil for exactly 2 1/2 minutes, stirring constantly.
Remove from heat and stir in vanilla and peanut butter. Mix until very smooth (whisk works well here).
You can pour this cooked mixture into any size pan you like (larger pan gives you thinner fudge), but just make sure you have lined the pan with parchment paper or foil first. I had great luck using a loaf pan.
Sit this pan of hot fudge on a cooling rack. After about an hour or so, the fudge will be FIRM, but still very warm. This is the BEST time to cut the fudge cleanly. Just grab onto the parchment paper or foil that you lined the pan with, and lift the whole thing out of the pan. Slice the fudge with a THIN, SHARP knife.
You can also wait and cut the fudge after its completely cool, but it cuts easier and more cleanly if you cut it while its still warm.
Store cooled fudge in airtight container.