1 c. butter, softened
2 c. sugar
3 eggs
3 c. all-purpose flour
1 c. buttermilk
1/2 c. warm water
3 tbsp. cocoa
1 tsp. baking soda
1 tsp. vanilla extract
Caramel frosting (recipe follows)

Cream butter; gradually add sugar, beating until light and fluffy. Add eggs, one at a time, beating well after each addition. Add flour alternately with buttermilk, beginning and ending with flour. Combine water, cocoa and soda, stirring well; add to flour mixture, beating well. Stir in vanilla.

Pour batter into 2 greased and floured 9 inch round cake pans. Bake at 350 degrees for 35-38 minutes or until wooden pick inserted in center comes out clean. Cool in pan 10 minutes; remove from pans and cool completely on wire racks. Spread caramel frosting between layers and on top and sides of cake.

CARAMEL FROSTING:

1 c. butter
2 c. sugar
1 c. evaporated milk
1 tsp. vanilla extract

Melt butter in a heavy saucepan over medium heat; add sugar and milk. Cook mixture over medium heat, stirring constantly until candy thermometer registers 234 degrees (soft ball stage). Remove from heat and add vanilla (do not stir); cool 10 minutes.

Beat on medium speed of electric mixer until thick enough to spread (about 10 minutes). Spread immediately on cooked cake. Yields enough for one 2 layer cake.