In a medium saucepan, bring milk and sugar to a boil over medium heat.
Reduce heat and simmer for 2 hours or until the mixture has reduced by half. A skin may form on the top, remove as desired.
Stir in butter and vanilla and mix until smooth.
Pour into a clean glass jar and refrigerate at least 1 hour prior to use.
Store in refrigerator for up to 2 weeks.