Bring milk, chocolate, sugar, cinnamon, and cayenne pepper to a simmer in a medium saucepan over medium-low heat, whisking frequently, until mixture is smooth and creamy and chocolate is melted, about 5 minutes. Don't allow the mixture to boil.
Remove from the heat and stir in the vanilla extract and salt.
Divide hot chocolate among mugs. Top with whipped cream and dust with a little extra cayenne pepper.