Line a 9-in. square pan with foil; set aside.

In a heavy saucepan, combine the chips & milk. Cook and stir over low heat until chocolate chips are melted.

Remove from the heat; stir in vanilla and gumdrops.

Spread into prepared pan. Cover and refrigerate until firm.

Using foil, remove fudge from the pan; cut into 1-in. squares.

Store in an airtight container at room temperature.