In a large bowl, cream butter and sugars until light and fluffy. Beat in egg yolks and vanilla. Combine the flour, cinnamon, baking powder, poppy seeds and salt; gradually add to creamed mixture and mix well.
Divide dough into 36 pieces; shape each into a 6-in. rope. Place 2 in. apart on greased baking sheets; curve the top of each cookie to form the handle of a candy cane.
Bake at 350° for 10-12 minutes or until edges are lightly browned. Cool for 2 minutes before removing to wire racks to cool completely.
Dip the handle of each cookie into melted chocolate; allow excess to drip off. Place on waxed paper; decorate with sprinkles, pistachios and/or coconut if desired. Let stand until set. Store in an airtight container.