Step 1

Place the marshmallows and butter in a large (3-quart) microwave safe glass bowl. For mini marshmallows, microwave, uncovered, on HIGH for 1 minute, stir until marshmallows are completely melted and mixture is smooth. (For regular size marshmallows, microwave 1 minute 15 seconds.)

Step 2

Add vanilla. Gradually stir in powdered sugar until all sugar is incorporated. It’s ok to use clean hands to “knead” the mixture to incorporate the sugar at the end. Mixture will be fairly stiff.

Step 3

Shape marshmallow “nougat” into six (5-inch-long) logs, about 3/4-inch-thick. Place on a parchment-lined plate in the freezer for about 30 minutes or until firm.

Step 4

Meanwhile, unwrap the caramels. Combine caramels and water in a microwave-safe glass bowl. Microwave at HIGH for 1 minute; stir well. Microwave an additional 15 seconds; stir until smooth. Microwave an additional 15 seconds and stir until all caramels have melted.

Step 5

Place whole or coarsely chopped peanuts on a plate or shallow bowl. Cut 6 pieces of parchment or wax paper (about 12x8”).

Step 6

Working quickly with one nougat log at a time, coat with melted caramel, using two forks. (Keep remaining logs in the fridge until ready to coat.) Using the same two forks, place the coated logs onto the pile of peanuts.

Step 7

Once the bottom of a log is covered in peanuts, use cean hands to roll and gently press peanuts into all areas. Place the log on a piece of parchment paper. When the caramel has cooled, roll it up and twist both ends to seal it. Tie curling ribbon around the ends for gifting, if desired.