Cream the butter, sugar and vanilla together until fluffy. Add the flour and walnuts and blend to form dough. Wrap in plastic wrap and chill for 1 hour.

Candy mixture: In a small bowl combine both ingredients. Set aside. Three tablespoons of this mixture is used in the filling and the remainder is used to garnish the cookies.

The filling: In a bowl blend together the cream cheese, milk, food coloring and the conf. Sugar until smooth. Blend in 3 T of the cnady mixture.

Remove the dough from the refrigerator and for each cookie pinch off a rounded teaspoon of the dough. Form into a ball and shape around your thumb to make a little compartment in the middle. Place about 1/4 teaspoon of the cream cheese filling in the depression. Pinch the dough back together and roll it back into a ball. Repeat the process with the remaining dough and filling. Place the balls on a nonstick cookie sheet. Bake in a preheated 350 oven for 10-12 minutes. Do not brown.

Remove cookies to a cooling rack. To garnish, roll the cooled cookies in the remaining candy mixture.