Recipe(tried): Caramel Recipe with Variations and information for Martin.

One of the secrets to caramelizing sugar is to use a heavy gauge, high-sided metal pan so that the sugar liquefies without burning.

For example, in a small saucepan, combine 1/2 cup sugar and 1/2 cup or more of water. Using your fingers to blend the mixture into a slurry. Use your moistened pastry brush to wipe down the inside of the saucepan which will prevent unwanted crystals from forming.

Caramel and Butterscotch are made in similar ways to toffee, as is fudge. The difference is in the degree of boiling temperature and the ways in which they are cooled. This whole process uses high-heat to convert sugar. Crystallization, graininess, and whether it is brittle or smooth are simply variations of this process.

Stir with wooden spatula or spoon over medium-low heat until sugar dissolves (make sure no crystals are felt when caramel is rubbed between fingers), occasionally brushing down sides of pan with wet pastry brush. It is essential that all sugar completely dissolves before the sugar comes to a boil. This includes the sugar crystals that cling to the sides of the pan, otherwise the mixture will crystallize once it boils, turning the caramel gritty. When dissolved, clip a candy thermometer to the inside of the pan.

Bring the mixture to a boil. DO NOT stir or shake the pan. As the sugar heats, it liquefies and the liquid in the sugar syrup evaporates. The liquid will reach the stage where very large bubbles form in the syrup

Continue to cook the sugar solution over the heat until it becomes a deep golden color. When the caramel becomes dark amber (or whatever color the recipe specifies), remove it from the heat immediately. If cooked too long, it darkens and turns bitter.

At this point two things can happen:

1. Some recipes have you stir in additional ingredients: for example, remove the pan from the heat and stir in cream, butter, vanilla, salt or nuts. When you add them, do so with the pan held away from you, as the mixture usually bubbles up.

Some examples of different ingredients used, and their outcome. From the Caramel Candy Recipe, stir in the following before pouring the caramel into a pan or molds. To make:

Almond caramel: Stir in 1/2 teaspoon almond extract and 1/2 cup sliced almonds (optional)

Coconut caramel: Reduce the amount of cream to 1/2 cup. Add 1/2 cup unsweetened coconut milk with the remaining cream.

Coffee caramel: Warm the cream and add 1 tablespoon instant espresso powder to it. Stir until it completely dissolves, then add the coffee-flavored cream with the sugar and corn syrup.

Rum caramel: Stir in 1 tablespoon rum extract

Vanilla caramel: Stir in 1 tablespoon vanilla extract

2. While other recipes call for using the cooked caramel as is, such as Flan. Classic flan begins with golden caramel that's made by boiling sugar and water to just the right syrupy consistency and pouring it into the bottom of a souffl dish or individual ramekin. A custard of eggs and milk (often flavored with vanilla) is then poured on top of the caramel and baked until it sets.

Source: Baking911

Hope this information helps you.