Preheat oven to 350°F. Melt over hot (not boiling) water, 1/2 cup peanut butter morsels; stir until smooth. Set aside. In small bowl, combine flour, baking soda, baking powder and salt; set aside. In large bowl, combine butter and sugar; beat until creamy. Blend in melted morsels. Beat in eggs and vanilla extract. Alternately bland in flour and milk. Pour into 2 greased and floured 8-inch round cake pans. Bake until crust is golden brown, 35 to 40 minutes; cool 10 minutes. Remove from pans; cool cake completely. Fill layers and frost side and top of cake with peanut Butter Cream Frosting. Garnish with coconut, if desired.

1 cup Peanut Butter Morsels
1 package (8-ounces) cream cheese, softened
1 tsp. vanilla extract
1/8 tsp. salt
3 cups sifted powdered sugar
2 Tbsp. milk

Melt over hot (not boiling) water, 1 cup peanut butter morsels; stir until smooth. In large bowl, combine melted morsels, cream cheese, vanilla extract and slat; beat well. Beat in powdered sugar alternately with milk until mixture is of spreading consistency.