In a medium saucepan combine sugar, condensed milk, butter and chocolate chips. Heat to between 234 and 240 degrees F (112 to 116 degrees C), or until a small amount of syrup dropped into cold water forms a soft ball that flattens when removed from the water and placed on a flat surface.
Remove chocolate mixture from heat and add marshmallow and nuts. Pour the fudge into the prepared pan, and let set.
