Combine gelatin and 1/2 cup cold water. Melt caramels and sugar with remaining water in saucepan over low heat. Stir frequently until sauce is smooth. Stir small amount of hot mixture into egg yolks; return to hot mixture. Cook 3-5 minutes over low heat, stirring constantly, until thickened. Stir in gelatin. Cool to room temperature.

Fold stiffly beaten egg whites and whipped cream into caramel mixture. Wrap a 3 inch collar of aluminum foil around top of 1 quart souffle dish; secure with tape. Pour mixture into dish; chill until firm. Remove foil collar before serving.

Melt sugar in skillet over medium heat until clear and caramel colored. Stir in nuts; spoon onto greased cookie sheet. Immediately separate nuts with two forks. Cool; break into small pieces.

Sprinkle over souffle before serving. Makes 6 servings. Typed in MMformat by cjhartlin@email. Msn. Com