In a mixing bowl, mix flour and sugar. In sauce pan, bring to boil the butter, water & cocoa. Pour over the sugar and flour mixture. Add remaining ingred. Mix by hand, beating with an electric mixer will cause cake to be dry. Pour into sheet cake pan (9x13). Bake at 350 deg. for 20-25 minute Test using toothpick -- Do not over cook. Ovens vary -- so be sure to test after 20 minute.
For frosting: In sauce pan melt butter, cocoa, milk -- add powdered sugar. Remove from heat add vanilla and nuts. Pour over very warm cake.