Preparation
Cake: Have ingredients at room temperature. Soak poppy seeds in milk 1 to 3 hours. Sift flour, measure, add baking powder and salt, and sift together three times. Cream butter using medium speed on mixer; add sugar gradually and cream well. Add egg whites, one at a time. Beat well after addition of each. Turn to low speed and add dry ingredients and milk-soaked poppy seeds alternately. Bake in two greased and floured 9-inch layer pans at 375 deg about 30 minutes. (Cake will raise only about 1/2 inch.) Cool and put layers together with filling; ice with Butter Icing.
Filling: Mix sugar, salt, and cornstarch together. Add milk and cook until it thickens, stirring constantly. Pour some of custard into slightly beaten yolks, then pour egg yolk mixture into custard and cook 2 minutes. Cool. Add vanilla and nuts. Spread between layers.
Butter Icing: Blend together butter and sugar. Add milk and vanilla and stir until smooth. Cream well using high speed of mixer until it looks like whipped cream.