In a saucepan, combine the chocolate, milk and cream and heat on low, stirring often, until the chocolate is completely melted and the mixture is smooth. Don't let it come to a boil; keep it on low heat.
Once melted, stir in the vanilla extract. If needed, stir in heavy cream or milk a tablespoon at a time to adjust for a thinner consistency. Pour the mixture into a fondue pot or small slow cooker to keep warm while serving.
Serve with dippers of your choice.
If by any chance you have leftovers, it will keep well in the refrigerator - just reheat on low to have yourself another chocolate fondue experience.