4 (8 oz.) bars milk chocolate, cut into tiny bits
2 tbsp. lukewarm, melted cocoa butter
2 (14 oz.) pkgs. plain caramels
4 tbsp. water
2 c. sm.-size pecan halves

Combine caramels and water in heavy saucepan. Set in a larger pan of warm water, put pan over medium heat. Melt caramel, stirring frequently, until soft, smooth and creamy. Remove from heating surface, but keep caramel over warm water.

Melt cut up chocolate in top part of double boiler, over boiling water. Stir occasionally. After 20 to 25 minutes, remove boiler from heating surface.

Immediately, add melted cocoa butter to the chocolate, beat with a wooden spoon or an electric mixer until smooth and glossy. Spread a layer of small pecan halves, flat side down, on a large, wax-paper-lined cookie sheet.

Drop 1 teaspoon of caramel, from the tip of spoon onto pecans, forming a little mound - about 1 1/2 inches apart. Press mounds down lightly, with finger tips, so pecans will adhere to the caramel.

Lift mounds out of pecan layer, with a fork, place on cake rack, set over wax- paper-lined cookie sheet, about 1 1/2 inches apart. Store excess pecans left on tray.

Pour warm chocolate over mounds, covering well. Let candies cool, about 2 hours or until chocolate is firm to the touch. Within two hours after candy has cooled, store in wax-paper-lined boxes.