In a small saucepan, bring water to a boil. Whisk in cocoa until mostly smooth with some lumps. Reduce heat to medium and whisk in milk until cocoa powder is dissolved.
Bring to a simmer and whisk in chocolate, sugar, and salt. Reduce heat to low and whisk until chocolate is smooth and incorporated. Taste and add more sugar if desired (I like 2 additional tablespoons for 1/4 cup total).
Remove from heat and stir in vanilla. Serve with whipped cream and marshmallows if desired.
Milk: Of course hot chocolate tastes more decadent and delicious with whole milk, but it's still plenty rich and chocolatey if you use 2% milk.
Bittersweet chocolate: Do not substitute semi-sweet chocolate; it will leave an artificial after-taste.
Sugar: Start with 2 tablespoons sugar and add more to taste (I add a full 1/4 cup when I make this recipe).
Yield: This Hot Chocolate recipe makes 4 cups (32 ounces or 1 quart).
Storage: Store leftovers covered in the refrigerator for up to 4 days. Some separation may occur, so stir to recombine while reheating.