In large bowl, with mixer on high, beat butter and sugar until light and fluffy, about 2 minutes.
Beat in vanilla and salt. Reduce mixer speed to low, and beat in flour (dough will be very dry). Beat in oats, crushed candy canes, and 12-15 drops of red food coloring. Shape heaping teaspoons of dough into balls, place on ungreased baking sheets 1/2 inch apart, and bake 15 to 18 minutes per batch.
Place icing sugar in large bowl. Roll hot cookies in sugar, let cool completely, and repeat.