Variation:  Dip apples in caramel but do not roll in pistachios.  Place on greased waxed paper;  chill until set.  Place 6 ounces semi-sweet chocolate morsels in large measuring cup; microwave on MEDIUM 2 to 3 minutes or until chocolate melts, stirring once halfway through  cooking time.  Dip caramel-coated apples into chocolate to coat lower half; scrape off excess.  Roll chocolate portion in chopped pistachios.  Set on greased waxed paper.

Conventional Method:  Heat caramels and water in heavy saucepan over low heat until melted; stir occasionally.  Heat chocolate morsels in separate heavy saucepan over low heat until melted; stir frequently.