Stir packet of gelatin into 1/4 cup water and set aside. Arrange 12 small heat proof containers for the caramel sauce. If you intend to flip them out of the containers onto a plate later, you can lightly grease them. I eat them out of the cups. Put 1 cup sugar and 1/4 cup water into a medium pot on high heat till mixture begins to boil, then turn to medium. Swirl the pot occasionally to distribute the heat; be careful of little specks of sugar water that splatter. Have your 3/4 cup boiling water ready. When the mixture turns amber (lighter or darker according to your taste), remove pot from the heat and tilt away from you. With oven mitted hand, pour the boiling water into the pot. The mixture will bubble and steam vehemently, swirl the pot to mix the boiling water and sugar so that the sugar does not seize. Pour a little over 1 tablespoon of caramel in each cup. Set a pot of water to boil. You essentially will be setting up a double boiler by placing your glass/metal bowl of custard (in the step below) atop it. Make sure that the boiling water will not touch the bottom of your glass/metal bowl when it rests on top. Optional: set up a second container with an ice bath, to place your glass bowl into once you're done cooking the custard. This will chill the mixture quicker so that you can sooner put your flans in the fridge but it's not necessary. In a glass/metal bowl, beat 5 eggs, 1/2 cup sugar, and 1 tsp vanilla together until smooth. Meanwhile, heat 1 cup of milk in the microwave until almost boiling. Stirring the egg mixture constantly, pour the scalded milk in a slow stream into the eggs to temper them. Set aside 3/4 cup of milk. Once the water is boiling, turn the heat down to a simmer (for me, this is medium low) and nestle your custard bowl on top, making sure it doesn't tilt and spew your liquids onto the burner. Add your gelatin mixture and stir gently (to minimize any bubbles) and constantly for fifteen minutes, or until your custard reaches a temperature of 170 degrees F (77 degrees C). You'll see the custard thicken slightly up the sides of the bowl. Check the texture to ensure it's smooth, if you see it start to curdle, this means the double boiler is too hot. Take the bowl off and turn the heat down to give your pot of water and custard a brief moment to cool down. Once the time is up or the temperature is reached, transfer your bowl of custard to the ice bath or alternately, a pot holder. As with tempering the eggs, stir your milk into the mixture and then continue stirring till your custard has cooled. At this point, it will still be fairly liquid. Pour the custard through a sieve and into another bowl to capture any large curds that may have developed. Then portion a little under 1/3 cup of custard into each container and let them cool to room temperature. If you care about appearances, before putting the flans in the fridge, tap/drop them lightly on the counter to remove any air bubbles that may be trapped and/or have formed on the surface. Otherwise, just cover and hide them away in the icebox for at least an hour. After that, you can guzzle them straight out of the cup. Or there are two other options. You can dip the cup in hot water or slide a slim object around the edge of the container and plop it on onto a dish.