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Sanders Caramel Frosting

1 pound caramels
1/2 cup hot water
1 cup sweet butter or margarine
1 cup confectioners' sugar

Place caramels and water in a double boiler. Heat and stir until smooth and creamy. Cool.

Place butter in a mixing bowl, add sugar and mix at low speed to a smooth paste. Mix at medium speed, adding caramel mixture.

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