Hazelnut Liqueur:
1/2 pound Hazelnuts, finely chopped
1+1/2 cups Vodka
1/3 cup Sugar
3 Tablespoons Water
1 teaspoon Vanilla extract
In a glass bottle or jar, steep the chopped hazelnuts in the vodka for about 2 weeks in a cool, dark place, gently shaking the bottle every day.
Gently pour the contents through a strainer or sieve, pressing hard on the nuts to release all the flavour. Follow this by 2 strainings through slightly dampened cheesecloth or large coffee filter - loosely cover the contents with plastic wrap, since the process may take several hours.
In a very small saucepan, combine the sugar and water. Bring to a boil over moderate-high heat. Simmer, uncovered for 5 minutes. Let cool to room temperature. Stir in the vanilla. Funnel into a glass bottle, the funnel in the sugar syrup. Cover tightly and shake to blend. Let mature at room temperature, or slightly cooler, for at least 3 weeks.