In a saucepan, combine butter, ¼ cup water and 1 cup sugar. Bring to a boil over medium heat and continue to boil for 5 minutes, stirring constantly. Remove from heat and stir in 1 cup of rum.
Preheat oven to 325 degrees. Grease and flour a 10 inch bundt pan (or mini pans). Sprinkle chopped nuts evenly over the bottom of pan.