Honey Macadamia Nut Fudge

1 1/2 cups granulated sugar
1 cup packed brown sugar
1/3 cup half-and-half
1/3 cup milk
2 tablespoons honey
2 tablespoons butter or margarine
1 teaspoon vanilla extract
1/2 cup macadamia nuts, hazelnuts, or
    pecans, toasted and chopped
36 chocolate-dipped macadamia nuts,
    hazelnuts, or pecans (optional)

Line an 8-inch square baking pan with foil, extending foil over edges of pan. Butter foil; set aside.

Butter sides of a heavy 2-quart saucepan with butter. In the saucepan combine the sugar, brown sugar, half-and-half, milk and honey. Cook over medium-high heat to boiling, stirring constantly with a wooden spoon to dissolve sugars. This should take about 5 minutes. Avoid splashing mixture on sides of the pan.

Clip a candy thermometer to the side of the saucepan. Cook over medium-low heat, stirring frequently, until thermometer registers 236 degrees F, or soft-ball stage. Mixture should boil at a moderate, steady rate over the entire surface. Reaching soft-ball stage should take 15 to 20 minutes.

Remove saucepan from heat. Add the 2 tablespoons butter and vanilla extract, but do not stir. Cool, without stirring, to lukewarm (110 degrees F). This should take about 50 minutes.

Remove candy thermometer from saucepan. Beat fudge vigorously with the wooden spoon until fudge is just beginning to thicken. Add chopped nuts. Continue beating until very thick and just starts to lose its gloss. This should take about 10 minutes total.

Quickly turn fudge into the prepared pan. While fudge is warm, score it into 1 1/4-inch squares. If desired, press a chocolate-dipped nut into each square. When candy is firm, use foil to lift it out of the pan; cut it into squares. Tightly cover the fudge and store in a cool, dry place.

Makes about 1 1/2 pounds.