1Line an 8x8x2 inch baking pan with foil, extending foil over edges of pan. Butter the foil and set aside. In a heavy 1 1/2 quart saucepan combine caramels, 3 tablespoons butter or margarine, and milk. Cook over low heat, stirring occasionally, till caramels are melted. Stir in the chopped nuts. Pour mixture into prepared pan. Chill about 1 hour or until firm. When firm use foil to lift candy out of pan, remove foil. Cut candy in desired shape and size. Melt chocolate and dip candy, place on baking sheet lined with waxed paper. Be sure candy stays cold while dipping or caramel will melt. I always put mine in freezer about an hour to cool so they will stay cold while I am dipping them. Store in a cool place, I keep mine in the refrigerator until we get ready to eat.