Taffy Apple Cookies

1 cup butter
2/3 cup granulated sugar
1egg, beaten
2 1/2 cups all-purpose flour
1/2 teaspoon baking powder
1 teaspoon vanilla extract
1 1/2 packages caramels
1/4 cup water
2 tablespoons evaporated skim milk
Nuts, ground

Cream butter with sugar. Add egg and mix well. Blend flour with baking powder. Add to creamed mixture. Add vanilla extract. Mix well and roll into tiny balls. Bake at 350 degrees F for 10 - 12 minutes on an ungreased cookie sheet. Remove from oven and insert a wooden pick (colored for the holidays) deep into each cookie. Let cool completely.

In top of double boiler, melt 1 1/2 packages caramels with water and evaporated milk. Stir constantly. When completely blended, dip cookies into mixture and then into nuts. Dip bottoms in powdered sugar to prevent sticking. Place on tiny liners.

Yield: 120 servings.