Grease three 9-inch round cake pans; line with wax paper. Grease and flour wax paper. Set aside
Beat butter .
Gradually add sugar, beating at medium speed 5 to 7 minutes.
Add eggs, one at a time, beating after each addition.
Add 1/4 cup Kahlua; beat until well blended.
Combine flour and next 3 ingredients; add to butter mixture alternately with milk, beginning and ending with flour mixture. Mix at low speed after each addition until blended. Stir in chocolate and vanilla.
Pour batter into prepared pans.
Bake for 20 minutes or until done.
Cool in pans on wire racks 10 minutes; remove from pans.
Brush layers with 1/3 cup Kahlua.
Cool while making frosting.
Ice top of first layer and sprinkle with 1/4 cup nuts.
Ice top of second layer and sprinkle with 1/4 cup nuts.
Ice the rest of the cake and sprinkle with nuts.
Chocolate Kahlua Frosting
Ingredients:
1/4 cup butter, softened
1 (8 oz) package cream cheese, softened
1 (16 oz) package powdered sugar, sifted and divided
3 (1 oz) squares unsweetened chocolate, melted and cooled