Beat first 4 ingredients according to cake mix package directions.
Beat yellow cake mix and next 6 ingredients according to package directions. Spoon red batter alternately with white batter into 3 greased and floured 9-inch round cakepans. Swirl batter gently with a knife.
Bake at 350° for 22 to 25 minutes or until a wooden pick inserted in center comes out clean. Cool in pans on wire racks 10 minutes. Remove from pans; cool on wire racks.
Spread Peppermint Cream Cheese Frosting between layers and on top and sides of cake. (Cake may be chilled up to 2 days or frozen up to 1 month.) Garnish, if desired. Serve within 2 hours.
*1 3/4 cups yellow cake mix may be substituted
NOTE: For testing purposes only, we used Duncan Hines Moist Deluxe White Cake Mix, Jiffy Golden Yellow Cake Mix, and McCormick Red Food Color.
If cake is frozen, thaw completely before garnishing to prevent crushed candy from running. Do not refrigerate after garnishing.
For testing purposes only, we used candy canes from the American Candy Company. Call 1-800-822-6398.