Combine sugar and water in a medium, heavy saucepan over medium-high heat; cook until sugar dissolves, stirring gently as needed to dissolve sugar evenly (about 3 minutes). Continue cooking 10 minutes or until the color of light brown sugar (do not stir). Remove from heat; carefully stir in butter and milk (mixture will bubble vigorously and caramelized sugar will harden and stick to spoon). Place pan over medium-high heat until caramelized sugar melts. Bring to a boil; cook 1 minute. Remove pan from heat; place in a large ice-filled bowl for 5 minutes or until caramel cools to room temperature.