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In a medium saucepan, combine the sugar and water. Cook over medium heat, stirring constantly, until the sugar has dissolved and the mixture comes to a boil.
Stop stirring and allow the mixture to cook, swirling the pan occasionally, until it turns a deep amber color, about 5-8 minutes.
Carefully pour in the heavy cream (the mixture will bubble up). Whisk constantly until the caramel is smooth.
Remove from heat and stir in the salt.
Allow to cool slightly before serving. The caramel will thicken as it cools.