Line 9x5-inch loaf pan with foil. In medium saucepan over low heat, melt vanilla-flavored candy coating and 1/4 cup shortening, stirring constantly until smooth. Remove from heat; stir in peppermint candy.** Spread in foil-lined pan. Let stand until firm.
Remove candy from pan by lifting foil. Cut into 1-inch squares. Let stand until very firm.
In small saucepan over low heat, melt coating ingredients, stirring constantly until smooth. Set saucepan in hot water to maintain dipping consistency. Dip half of each peppermint candy square into coating; allow excess to drip off. Place coated side up on waxed paper. Garnish as desired. Let stand until set.