Line an 8x8-inch baking pan with aluminum foil and set it aside.
In a saucepan, combine the chocolate chips, sweetened condensed milk, and butter. Heat over medium-low, stirring constantly (to avoid burning) until fully melted. Do not be tempted to turn up heat. Chocolate should be melted low and slow. Remove saucepan from heat.
12 oz. semi-sweet chocolate chips, 14 oz. sweetened condensed milk, 2 tablespoons butter
Stir in 1 1/4 cups of mini marshmallows and the remaining walnuts. Spread the mixture evenly into the prepared pan.
1-1/4 cups mini marshmallows, 1-1/4 cup chopped walnuts
Sprinkle the reserved marshmallows and walnuts on top, gently pressing them into the surface of the fudge.
1/4 cup mini marshmallows, 2 tbsp chopped walnuts
Let the fudge cool at room temperature for 30 minutes. Then, place it in the refrigerator for at least 2 hours or overnight to set.
Once fully chilled, remove the fudge from the pan and peel off the foil. Use a large, sharp knife to cut the fudge into squares. First cut into strips and then cut each strip into a piece. You should get approximately 5 pieces per strip.
Notes
Please see full fudge article for tips on how to lay down foil without tearing.