How to make caramel from sweetened condensed milk :
source : Chockylit
1 8 ounce can sweetened condensed milk
1. Immerse closed can on its side in a pot of boiling water.
2. Leave on a simmer or light boil for 2 hours topping off with water as needed. Be careful and don’t let the water dry out.
3. Remove from heat and let cool thoroughly before opening can. Condensed milk should be thick and a nice caramel color. Don’t open the can while its still hot, I hear that can be very, very messy.