In a heavy-bottomed saucepan, combine sugar, butter, and evaporated milk. Cook over medium heat, stirring constantly, until butter is melted and sugar is dissolved.
Bring the mixture to a boil and cook for 5 minutes, stirring occasionally. Do not let it scorch.
Remove from heat. Stir in milk chocolate chips and marshmallows until melted and smooth.
If using, stir in chopped nuts.
Pour the mixture into the prepared baking pan and spread evenly.
Let cool at room temperature for at least 2 hours, or until firm. Cut into squares.
Notes
Store fudge in an airtight container at room temperature for up to 1 week.