With a hand mixer, cream together the peanut butter, butter, white sugar and brown sugar until blended. Beat in the egg, milk, and vanilla.
Combine the flour, baking powder and salt in a separate bowl. Add flour mixture to the peanut butter mixture and mix together.
Stir in the crushed Peanut Butter M&Ms. Scoop tablespoonfuls of dough and roll into balls.
Place cookies 2 inches apart on ungreased cookie sheets (I used parchment paper since my cookies tend to burn on my darker pans). Press each ball once with a fork.
Bake for 8-10 minutes. Don't overcook! These cookies are much better soft and just barely cooked all the way through!
Let the cookies cool on the cookie sheet for a few minutes before transferring to a wire rack to cool completely.
*Every time I have made these cookies I have used a regular creamy peanut butter (like Jif or a store-brand alternative). Several readers have commented that the cookies do not turn out as well when using a natural peanut butter.