Can be drunk to obtain an empty bottle but causes damage upon consumption.

There is a "combine" option for this item in the inventory, but it is not currently known what it can be combined with. Trying to combine it with a cup of regular coffee causes "You" to say he won't risk it on a good cup of coffee and instead prefers his coffee black.

There is no way to empty the bottle of milk besides drinking it. Drinking the milk counts against you in the "Psych Report" at the end of the game, with the entry "Drank obviously spoiled milk".

Once the bottle is empty you can fill it with water from the bucket you place beneath the leaking ceiling in the apartment you occupy. Water restores health if you're injured which can help to ease the game's difficulty level. Going through the game without water is possible, especially on a second playthrough.