1 (14 oz) pkg of caramel (like Kraft)Preheat oven to 300°F. Put water, butter and caramel in a saucepan over low heat. Cook until caramel is completely melted - stir frequently to keep lumps from forming.
1-2 T water
8-10 C popped, unbuttered popcorn
1 C peanuts or almonds - optional
3 T butter/ margarine
Combine popcorn and nuts in a bowl. Add the melted caramel and toss to coat evenly.
Spread on a greased baking sheet and bake for 6 minutes. Stir and then bake for an additional 5-6 minutes. Cool completely and break into clusters.
