1. Lightly grease a 9-inch-square baking pan. Combine all ingredients except vanilla in a broad saucepan or deep skillet and turn heat to medium-low. Cook, stirring occasionally, until sugar dissolves.
2. Mixture will bubble and darken; when color is dark beige and mixture measures 235 degrees on a candy thermometer, it is butterscotch sauce. (Use immediately or refrigerate for up to several weeks; warm in a microwave oven or over hot water to soften.) To make caramels, keep cooking and stirring until mixture is even darker, nearly brown, and measures 245 degrees (or until a piece of it forms a firm ball when dropped into a glass of cold water).
3. Stir in the vanilla and pour into prepared pan. Cool, then remove from pan in a block and refrigerate, but not for too long - what you want is a mixture cool enough so that it's not too sticky, but not so cold that it's solid; this is the easiest state in which to cut and wrap.
4. Use a sharp knife to cut caramel into pieces, then wrap each square in waxed paper or plastic wrap. These keep for weeks, especially if refrigerated, but are best eaten fresh and at room temperature.
Kellie xx
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