Nutted Caramel Popcorn Balls

1 lb Dairy caramels
2 tb Hot water
2 qt Popcorn (to 2 1/2 qt)
1 c Mixed salted nuts
1/2 c Salted peanuts

Day before: In covered double boiler, heat caramels with water, stirring frequently, till smooth.

In a large bowl, toss popcorn with nuts.

Pour melted caramels over popcorn; toss until well coated. With buttered hands, form at once into about 17 2 1/2" balls or 35 1 1/4" balls. Insert wooden skewers, lollipop fashion, if desired. Wrap each in saran; store at room temperature until served next day.