These are peppermint filled cookies with a bit of crushed peppermint on the top.
Cream together butter, 1/2 cup confectioner sugar, and vanilla. Add flour and walnuts, and chill.
Meanwhile, combine crushed peppermint with 1/2 cup confectioner sugar and set aside.
Prepare filling: Mix cream cheese, milk, and 1/2 cup confectioner sugar. Add 3 tablespoons of above peppermint sugar mixture plus 1 drop of red food coloring. Mix well.
Once dough is chilled, preheat oven to 350. Shape chilled dough into balls (large teaspoon). Fill each with 1/4 teaspoon of filling and seal. Bake on ungreased cookie sheets for 12-15 minutes. Roll in peppermint sugar mix once when warm and again when cool.
Makes 5 dozen.