In large bowl, cream butter and sugar until light and fluffy.

Beat in the egg, milk and vanilla.

Combine the flour, baking powder and salt; gradually add to the creamed mixture and mix well. Cover and refrigerate for 2 hours or until easy to handle. (Do not leave it in your garage at 32 degrees for 5 hours, you will not be able to move it!)

Meanwhile, coarsely crush your candy canes (you can use colored hard candies such as Life Savers, but I didn't find they worked very well for me and I liked the candy cane taste); set aside. On a lightly floured surface, roll out dough to 1/8-in. thickness.

Cut with 4-in cookie cutters dipped in flour.

Cut out centers with 1-in. cookie cutters.

Place cookies 1 in. apart on lightly greased foil-lined baking sheets.

Fill centers with crushed candies. (Instead of using flour and greased cookie sheets, I used parchment paper. I threw my dough between two pieces to roll it out and then left the cut-out cookies on the parchment paper to bake. They didn't stick to anything and it was so much easier to throw them on the cooling rack and re-use the pan right away.)

Bake at 375 for 8-10 minutes or until the candy is melted and the edges begin to brown.

Cool completely on baking sheets.

Carefully peel cookies off the foil.