1/2 c. butter
1 tsp. vanilla
2 c. flour
1 egg
1/2 c. powdered sugar
1/4 c. brown sugar

Mix above ingredients together. Roll into balls. Place on greased cookie sheet. Bake at 350 degrees 15-18 minutes. While warm, place colored toothpicks in each.

On stove, melt in double boiler: 1/2 c. evaporated milk Optional: Red food coloring

Melt caramels and milk together. Add food coloring if desired, 1 or 2 drops. Dip cookies in caramel mixture, then roll in ground nuts. Place in midget party cups.