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Begin by placing the sugar in a clean pot and allow it to melt over low heat, stirring occasionally.
Once the sugar has completely melted and begins to change color, incorporate the butter or margarine and stir until it has melted.
Next, add the milk, which can be either powdered milk mixed with water, condensed milk, or heavy cream.
If desired, sprinkle in some salt to create a salted caramel flavor.
Your homemade caramel sauce is now ready. Remember, it will thicken as it cools.