1 pkg. yellow cake mix
1 (4 serving) pkg. vanilla instant pudding
1 1/3 c. water
4 eggs
1/4 c. oil
2 c. angel flake coconut
1 c. chopped walnuts or pecans

Blend cake mix, pudding mix, water, eggs and oil in large mixing bowl. Beat at medium speed of electric mixer 4 minutes. Stir in coconut and nuts. Pour into 3 greased and floured 9-inch layer pans. Bake at 350 degrees for 35 minutes. Cool in pans 15 minutes; remove and cool on rack. Fill and top with Coconut Cream Cheese Frosting.

COCONUT-CREAM CHEESE FROSTING:

4 tbsp. butter
2 c. angel flake coconut
1 (8 oz.) pkg. cream cheese
2 tsp. milk
3 1/2 c. sifted confectioners' sugar
1/2 tsp. vanilla

Melt 2 tablespoons butter in skillet. Add coconut, stir constantly over low heat until golden brown. Spread coconut on absorbent paper to cool. Cream 2 tablespoons butter with cream cheese. Add milk, beat in sugar gradually. Blend in vanilla, stir in 1 3/4 cups of the coconut. Spread on tops of cake layers. Stack and sprinkle with remaining coconut.