Preheat the oven to 350°F (175°C).

In a mixing bowl, combine the flour, baking powder, and salt.

In another bowl, cream together the butter and granulated sugar until light and fluffy.

Add the eggs one at a time, mixing well after each addition.

Alternately add the flour mixture and milk to the butter mixture, starting and ending with the flour mixture.

Fold in the dulce de leche until well combined.

Pour the batter into a prepared cake pan and smooth the top.

Bake for 30 minutes or until a toothpick inserted into the center comes out clean.

Allow to cool completely before frosting.

In a separate bowl, beat the cream cheese and powdered sugar until smooth and creamy.

Stir in the vanilla extract.

Frost the cooled cake with the cream cheese frosting.