Frosting:

6 oz. cream cheese, softened
1/2 cup butter, softened
1/2 teaspoon vanilla extract
1/2 teaspoon peppermint extract
6 cups powdered sugar
1/4 cup hot water
4 oz. semi-sweet chocolate, melted

In large bowl, combine cream cheese, 1/2 c. butter, vanilla and peppermint extracts; blend until smooth. Add powdered sugar alternately with hot water, beating until smooth. Blend in chocolate. Set aside.

Cake:

2 cups frosting (see above)
1/4 cup butter, softened
3 eggs
2 cups flour
1-1/2 teaspoon baking soda
1 teaspoons salt
3/4 cup milk

Preheat oven to 350°F. Grease and flour two 9-inch round cake pans.

In a large bowl, combine 2 c. of the frosting mixture (see above) and 1/4 c. butter; blend well. Beat in eggs, one at a time, beating well after each addition. Lightly spoon flour into measuring cup; level off. Add flour, baking soda, salt and milk; beat until smooth. Pour batter evenly into greased and floured pans.

Bake at 350°F for 30 to 40 minutes or until toothpick inserted in the center comes out clean.

Cool 5 minutes.

Serves 12.