Step 1

In a small saucepan, stir together sugar and cocoa powder. Add water and heat over medium heat, stirring continuously until well-combined and smooth.

Step 2

Stir in caramel sauce followed by milk. Heat, stirring often, until milk is steaming hot. Do not let your hot chocolate come to a boil.

Step 3

Pour into an 8-ounce mug, top with whipped cream or marshmallows and optional extra caramel sauce, and enjoy!