Step 1Place the sugar in a small, heavy saucepan and cook over medium heat, stirring until the sugar dissolves, then cook without stirring until it is a deep reddish brown, 10 to 15 minutes. Pour in 1 cup of water and stand back to avoid the steam and splatter. Wait 1 minute, then add the remaining 1 cup of water and boil, stirring occasionally, until any hardened caramel has melted, 5 to 8 minutes.
Step 2Add the butter and boil until the mixture reaches 245 degrees on a candy thermometer, about 15 minutes; the coating on a spoon dipped into the mixture and then in cold water will have a gummy consistency. Stir in the cream and vanilla and simmer until it reaches the desired consistency; it should flow smoothly almost in a continuous drip off the spoon. This should take 2 to 5 minutes. Let cool, then refrigerate until use.