Melt caramels with water in 1 1/2 quart saucepan over low heat, stirring until sauce is smooth. Wash and dry apples; insert stick into stem end of each apple. Dip into hot caramel sauce; turn until coated. Scrape off sauce from bottom of apples. Place on greased waxed paper. Create eyes and mouth with miniature marshmallow halves. Create nose with candy corn. Make hat from construction paper, leaving opening for wooden stick.

Source:  Recipesource