Place butter in a fry pan set on medium-high heat. When butter has melted and come to a boil, swirl pan occasionally. Butter will start to foam. Watch for milk solids to turn deep golden brown and the butter will smell caramel-like and nutty. Stay with the butter during the whole process because it can burn. Do NOT take your eyes off the butter because it can go from browned to burnt really quickly. Also as soon as your butter is browned, pour it (making sure you scrape down all the bits) into a bowl so the butter does not continue to cook.
Immediately scrape all the butter into a bowl and set aside.
NEVER use margarine for this. It will NOT work.