1. Put milk in a small saucepan and heat it to just the point where it is about to boil. Remove from heat. Add 5 tablespoons butter or margarine. Put aside to cool. (You can put it in the fridge to cool for 10 minutes.)
2. Generously grease the bottom, middle, and sides of a standard sized tube or bundt pan.
3. Put the water in a large bowl and sprinkle in the yeast.
4. When the milk mixture has cooled to wrist temperature (important--no hotter!), add it to the yeast, along with the salt and sugar.
5. Add the flour, one cup at a time, beating after each addition, with a wooden spoon at first, and with your hand with it gets harder to do.
6. When all the flour is mixed in, turn the dough out onto a floured surface and knead for 5 to ten mintues. Add a little flour if necessary, to keep the dough from getting too sticky to handle.
7. Clean the bowl; grease it well. Add the kneaded dough, and oil or butter the top. Put it in a warm place to rise until doubled. (2 hours)
8. Put the chocolate chips in a food processor or blender, and grind them til they resemble coarse meal. Transfer to a small bowl and combine with the unsweetened cocoa. Put 1/3 cup of this mixture and sprinkle it into the bottom of the greased pan, distributing it as evenly as possible. Sprinkle in the chopped nuts.
9. After the dough doubles in bulk, punch it down and return it to the floured surface. Knead another 5 or 10 minutes.
10. Use a rolling pin to roll the dough into a large oval, about 9-10 inches wide at the middle, and 16-17 inches long. (Press the dough down as you roll.)
11. Sprinkle the rest of the chocolate filling as evenly as possible
over the dough, leaving a 1/2 inch rim around the outer edge. Roll it up
tightly along the long edge, pinching the edges to seal them. Lift the
babka carefully and ease it into the pan, making as even a circle as possible.
Pat it firmly into place, and then seal the two ends
together with a little water and a good pinch.
12. If you want to bake the babka the same day, let it rise at room temperature for 45 minutes. If you want to bake it a day or two later, wrap it airtight in a plastic bag, and refrigerate until baking time. (It will rise enough in the fridge; and can go directly from the fridge to the hot oven.)
13. Preheat oven to 375 degrees. Bake 45-50 mintues, or until it gives off a hollow sound when thumped.
14. Remove babka from the pan and invert onto a plate; the chocolate nut coating is thus on top. Try to wait 30 minutes before eating it.