Step 1In a small bowl, mix 1 cup of water with the cornstarch. Set aside.
Step 2Pour the remaining 2 cups of water into a medium saucepan. Add the chocolate, and cook over medium-high heat, stirring until the chocolate is melted and smooth.
Step 3Mix in the milk and sugar. Give the cornstarch mixture a quick stir and add it to the saucepan. Cook over medium heat, stirring constantly, or until the mixture begins to coat the back of a spoon, about 5 to 8 minutes. (The hot chocolate will continue to thicken even after cooking to the desired pudding-like consistency.)
Step 4Remove from the heat and stir in the vanilla. Add more sugar if desired. Serve immediately.