Processing conditions and ingredient selection, particularly fat type and milling time, play a critical role in determining the quality of compound chocolate. This study investigated the effects of milling duration (120, 135, and 150 min) and alternative fat sources, RBD (Refined, Bleached, and Deodorized) coconut oil, RBD palm kernel olein oil, and Meizan fortified palm olein oil, on the physicochemical, structural, and sensory properties of compound chocolate produced using a ball mill. Chocolate samples were evaluated for moisture content, viscosity, particle size, particle size distribution (PSD), color attributes, and sensory characteristics, with PSD analyzed using dynamic light scattering (DLS). The results showed that increasing milling time reduced moisture content and particle size while influencing viscosity and color parameters. Palm-based fats produced finer and more uniform particle size distributions at shorter milling times compared to RBD coconut oil. Among the fat systems, Meizan fortified palm olein oil exhibited the most uniform PSD and superior sensory acceptance, indicating more efficient particle refinement. Overall, the findings demonstrate that fat type and optimized milling time critically influence compound chocolate quality, and that fortified palm olein oil represents a promising alternative fat for producing high-quality compound chocolate.