In a large mixing bowl, cream butter and powdered sugar.
Stir in vanilla.
Gradually add flour.
Stir in pecans.
Refrigerate for 3-4 hours or until easy to handle.
Preheat oven to 350 degrees.
Roll dough into 1 inch balls and place 2 inches apart on ungreased baking sheets.
Bake for 18-20 minutes or until lightly browned. Remove to wire racks to cool.
In a microwave safe bowl, melt candy coating, stir until smooth.
Dip the top of each cooled cookie into the candy coating, then into the peppermint candy.