Preheat oven to 350F.

Grease and flour a 12-cup fluted tube pan or 10-inch tube pan.

In a large bowl, combine cake mix, pudding mix, water, eggs, and oil.

Beat with an electric mixer on low speed until blended.

Beat on high speed for 2 minutes.

Gently stir in chopped apples.

Pour batter into the prepared pan.

Bake for 50 minutes to 1 hour, or until a toothpick inserted into the center comes out clean.

Cool in the pan for 20 minutes.

Remove cake from pan and cool completely on a wire rack.

In a microwaveable bowl, combine caramels and milk.

Microwave on HIGH for 1-1/2 minutes, stirring every 30 seconds, until blended.

Cool for 10 minutes until slightly thickened.

Drizzle caramel mixture over the cooled cake.