Whisk together the milk, water, and sugar in a medium saucepan over medium heat. Whisk periodically until the sugar has dissolved. Increase the flame to medium-high, and bring to a boil. As soon as it comes to a boil, remove from heat, and whisk in the chocolate. If you have an immersion blender, blend the hot chocolate in the saucepan. If not, transfer to a regular blender, holding a dish towel tightly over the lid as you blend on high speed, taking care with the hot liquid. Blend for 1 minute, until the hot choclate is very smooth and frothy. Pour into mugs, and enjoy!