Combine sugar, flour, and egg in top of a double boiler; add milk. Cook over boiling water, stirring constantly, until thickened and smooth. Remove from heat; add butter and vanilla. Stir until butter melts.
Spoon butterscotch mixture into individual dessert cups, and serve warm or chilled. Sprinkle with chopped peanuts, if desired.
Oxmoor House Homestyle Recipes
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