CAKE:

2/3 c. butterscotch chips
1/4 c. water
1 1/4 c. sugar
1 tsp. salt
1/2 tsp. baking powder
1/2 c. butter
3 eggs
1 c. buttermilk
2 1/2 c. flour
1 tsp. baking soda

Melt butterscotch chips in water. Cream sugar and butter. Stir in eggs, one at a time. Blend in butterscotch mixture. Add dry ingredients alternately with buttermilk.

Pour into 2 greased and floured 9-inch cake pans. Bake 30 minutes. Remove from pans and cool.

FILLING:

1/2 c. sugar
1 tbsp. cornstarch
1/2 c. canned milk
1/3 c. water
1/3 c. butterscotch chips
1 egg

Combine ingredients and cook over medium heat until thick. Add 2 tablespoons butter, 1 cup coconut, and 1 cup nuts (pecans, chopped). Spread half of filling between layers and half on top of cake. Just before serving, frost sides of cake with whipped cream.