Heat milk and coconut milk together in a medium saucepan over medium-low heat; do not boil.
Add milk chocolate chips and 1 tablespoon caramel sauce. Stir until chocolate is melted. Divide into mugs, top with whipped cream, toasted coconut and a drizzle of caramel sauce.
Since the Nestle Delightfulls have been discontinued, the recipe has been updated to use regular milk chocolate chips instead. *To toast the coconut, spread on a cookie sheet and bake at 350 degrees for 2-3 minutes, until it's mostly browned.