Start by melting the granulated sugar over medium heat to make the caramel. Once you notice the bottom layer start to melt, give it a good stir and let the rest melt as well. Make sure to keep an eye on your caramel because we don't want it to darken too much.
Once the sugar is mainly melted and has turned into ambercolored caramel, add in the water. The sugar will seize but keep the pot over medium heat and stir to dissolve.
Once the sugar is almost fully dissolved add in the milk powder and continue to stir. Once combined, bring the mixture to a boil then reduce to a brisk simmer. Let the sauce simmer for 8-10 minutes keeping an eye on it so it doesn't boil over.
When the timer is almost up (30 seconds), add in the caramel extract and stir. Let the mixture cool down before transferring it to a jar and storing it in the fridge or using it in your favorite coffee or latte.
