Stir together the milk and sugar in a large sauce pan. Heat over medium heat and bring the mixture to a low simmer. Simmer uncovered until the mixture is reduced in half (20-30 minutes) whisking frequently to keep the milk from burning.
Once the milk is reduce, remove the pan from the heat and stir in the butter and vanilla extract.
Allow the mixture to cool completely and then use with your favorite recipes or store in the refrigerator for up to 1 week.
Notes
Recipe roughly makes about 1 1/4 cups of Sweetened Condensed Milk.