PREHEAT oven to 425F and line a baking sheet with parchment. Unroll puff pastry on a cutting board and cut crosswise into 8 even strips. Beat egg with water in a bowl, then brush over 4 of the strips. Sprinkle 1 tbsp mini chocolate chips down centre of brushed strips. Cover with remaining strips, pressing down. Twist each into a 14-in.-long rope. Form into heart-shaped pretzels, pinching bottoms to create a point on prepared sheet. Repeat with remaining puff pastry sheet, then brush with more egg wash.
BAKE until golden, about 20 min. Let cool slightly, 5 min. Microwave milk chocolate in a microwave-safe bowl, stirring halfway, 30 to 60 sec. Drizzle cretzels with chocolate and sprinkle with almonds. Let cool completely. Dust with icing sugar and drizzle with more chocolate.
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