Cream together sugar and butter in a medium sized mixing bowl.
Stir in vanilla and peppermint extract, 2 of the crushed candy canes, and milk. Add flour and salt, mix well.
Cover dough and place in refrigerator for about 30 minutes.
Remove from refrigerator and roll into 12-18 evenly sized balls. Place balls on wax paper and refrigerate.
Place white chocolate chips in a microwave safe bowl and heat at 50% power, and at 30 second intervals. Stir in between each interval until melted.
Remove balls from the fridge and roll each in the melted chocolate. Drop onto wax paper, then quickly sprinkle crushed candy cane over each before the chocolate hardens.