In a large saucepan, combine the milk and drink mix. Cook and stir over medium heat until heated through. Remove from the heat. Set aside 1 tablespoon crushed candy canes for garnish. Stir remaining candy canes into cocoa; keep warm.
In a small bowl, beat cream until it begins to thicken. Add confectioners' sugar and vanilla; beat until stiff peaks form. Ladle cocoa into mugs. Top with whipped cream; sprinkle with reserved crushed candy canes. Yield: 4 servings.