Although caramel and dulce de leche look and taste similar, they are made in different ways. Homemade caramel is made by simmering sugar with water until it caramelises, before adding cream and, often, butter to make a thick, sweet and creamy sauce. Dulce de leche is made by heating up milk with sugar very slowly, simmering until it caramelises. It is very popular in Latin America, Spain, Portugal and the Philippines.