Melt the caramels, condensed milk, and butter in a saucepan over medium-low heat for best results. It’s essential to keep the stovetop fairly low and stir as you melt. Otherwise, the sugar can burn as you cook. You could also prepare the caramels in the microwave. Just make sure to melt at low power in 30-second increments. The microwave can also easily burn the caramel if you go at full power.