Put first 5 ingredients in a large sauce pan over medium heat and stir until melted and combined. Bring to a boil and stir for five minutes. Be careful to keep stirring so that it doesn't start to burn on the bottom of the pan. Take caramel off the burner after 5 minutes.Put the hot caramel in a deep container. I used my Pyrex 4 cup measuring cup
Prepare a couple cookie sheets lined with wax paper.Dip pretzel rod in caramel, about 3/4 of the way and let it drip off any excess caramel. Then lay the rod on the cookie sheet.Repeat with remaining pretzels.
Put cookie sheets in the fridge to help set up caramel.Once caramel is set, lift up each pretzel rod off the wax paper and mold caramel around the rod since it will puddle on the sides as it cools.
Prepare the cookie sheets again with new pieces of wax paper.Melt chocolate in a deep container and dip caramel covered pretzel rods.Place chocolate covered pretzel rods on cookie sheets and place in fridge to set up.
In a zip lock baggie, melt the vanilla candy melts in the microwave. When completely melted, cut a tiny hole in the corner and drizzle the chocolate on the rods.Place back into the fridge to set up.