Wash apples and remove the stems.

Insert wooden sticks 3/4 of the way into the stem end of each apple.

Set aside while you cook the caramel dip.

Combine caramels and water in a saucepan over low heat. Cook, stirring often, until caramel melts and is smooth.

Stir in vanilla extract.

Dip each apple into the caramel and gently run apples around insides of saucepan coat evenly. Or drizzle each apple with the caramel mixture.

Smooth excess caramel from the apple bottoms using the side of the saucepan.

Place on a lightly greased cookie sheet and chill until ready to serve. (about 15 minutes or until firm)