Place the sugar in a small, heavy saucepan and cook over medium heat, stirring till the sugar dissolves, then cook without stirring till it is a deep reddish brown, 10 to 15 min.
Pour in 1 c. of water and stand back to avoid the steam and splatter.
Wait 1 minute, then add in the remaining 1 c. of water and boil, stirring occasionally, till any hardened caramel has melted, 5 to 8 min.
Add in the butter and boil till the mix reaches 245 degrees on a candy thermometer, about 15 min; the coating on a spoon dipped into the mix and then in cool water will have a gummy consistency.
Stir in the cream and vanilla and simmer till it reaches the desired consistency; it should flow smoothly almost in a continuous drip off the spoon.
This should take 2 to 5 min.
Let cold, then chill till use.
This sauce has a tendency to separate and granulate when cool, so it should be warmed up and stirred well before using.