Put the sugar into a sauce pan.

Cover the pan with the water.. Cook the sugar and water over medium heat.

Bring the sugar to a boil. Have your cream and everything ready to go.

When it starts to get to this stage, keep a close eye on it. This takes about 10 minutes.

When it turns a dark golden amber color (350 on a candy thermometer, but who needs one of those?) you are ready to pour in the cream.

It is going to bubble like crazy. Just keep whisking and it will all come together.

See, I told you so. Just like magic. Add the vanilla off of the heat.

Allow the caramel to come to room temperature. It will thicken up as it sits. Keep it in the fridge.