Make sure your cream cheese is at room temperature for easy mixing. For fast heating, remove the cream cheese from the package and cut into large chunks. Microwave in a medium bowl for 15 seconds.
In a medium bowl, whisk together the cream cheese, powdered sugar, peppermint extract, and milk. If you want the dip thinner, continue adding milk 1/2 Tablespoon at a time until you reach your desired consistency. Microwave again if needed as sometimes cold milk makes the cream cheese chunky again.
If you want the dip to be pink, add a drop or two of red food coloring and stir to combine. A little goes a long way, and add more one drop at a time until you get the desired color.
Stir in the milk and white chocolate chips and the crushed candy cane. Season to taste with additional peppermint and powdered sugar. Chill if desired but keep in mind this will make the dip thicker and stiffer.
Garnish with sprinkles, additional crushed candy canes, and chocolate chips if desired. Serve with your favorite dunkers like cookies or chocolate.
If your dip is too thick, add a little milk. Chilling makes the dip thicker and as it warms, it will thin out again.