Wash and dry apples thoroughly. Remove stems and insert the wooden sticks into the stem hole until about half the stick is in the apple.
In a small saucepan, over low heat melt the caramels with the water, stirring completely. Now dip the apples into the hot caramel sauce, coating the apple completely. Place on greased, wax paper.
Store your caramel-covered apples in the refrigerator. Before serving, remove them from the refrigerator and allow them to stand for about fifteen minutes. You can serve your caramel-covered apples on a large platter and use extra caramels as a garnish.
Make faces on your caramel apples with candy corn, and miniature marshmallows.