Start by lining an 8x8-inch square baking pan with parchment paper, allowing some overhang on the sides. Make sure the parchment is pressed into the corners to avoid gaps.

In a medium saucepan, combine sweetened condensed milk, butter, and chocolate chips. Set the heat to low, stirring continuously for about 5–7 minutes until the mixture melts into a smooth consistency.

Once the fudge base is smooth, remove the saucepan from heat and stir in the vanilla extract. Carefully fold in the mini marshmallows, maintaining visible swirls in the chocolate mix.

Pour the fudge mixture into the prepared baking pan, using a spatula to spread it evenly. Create swirls by gently dragging the spatula through the mixture. Allow the fudge to cool at room temperature for about 10 minutes, then refrigerate for at least 2 hours until it sets firm.

Once the fudge is set, lift it out of the pan using the parchment overhang. Place it on a cutting board and slice into 16 squares using a buttered knife.