Combine sugar, flour, and salt.
Add milk, egg yolks, and butter.
Cook in top of double boiler, stirring constantly, until thick (about 10 minutes).
Remove from heat.
Add vanilla extract, chocolate, and nuts.
Cool, then chill in refrigerator for several hours.
Form into small balls, about 1/2 inch in diameter.
Roll in coconut.
Store in refrigerator until serving time.