In a small saucepan, melt 1/4 cup butter and 2 squares (2 oz) chocolate over low heat, stirring constantly. Stir in sugar; gradually stir in evaporated milk.
Heat to boiling over medium-high heat, stirring constantly. Cook and stir 5 minutes or until slightly thickened; stir in vanilla. Cool completely, about 2 hours.
Use right away (warm), or cover and refrigerate the sauce.