I mentioned these a year or three ago but had no recipe or pictures.
We got it together this year and the Cookie Queen did a good job. We
were gifted 12 pounds of cashews so that's what was used. Peanuts are
fine too.

The balls ready to bake:

http://i53.tinypic.com/2lnjtbc.jpg

Baked and ready to coat:

http://i56.tinypic.com/24ymdsm.jpg

Finished. There's a few nuts that didn't get chopped enough but
O-well.

http://i55.tinypic.com/2ccqd1i.jpg

Caramel Apple Cookies

½ lb butter 1 bag Kraft caramels
2 egg yolks ½ cup milk
½ cup powdered sugar 2 cups chopped nuts
2 ½ cups flour

Cream room temperature butter, yolks and powdered sugar together in
large bowl. Add flour and mix well. Roll dough into little balls,
about the diameter of a quarter. Bake on ungreased cookie sheet for
15 minutes at 375 degrees. Bottoms will be slightly browned.
Immediately put round toothpick in center of each ball. You must do
this when they are still hot or cookies will split. Let cookies cool
completely while you melt the caramels.

Melt caramels in a double boiler with the milk until liquid. Stir
often. When cookies are cool, dip in the caramel and swish back and
forth once to fully cover the cookie. Let excess caramel drip off,
then roll in chopped nuts to look like a caramel apple. The cooler
the caramel is, (but not stiff) the better the nuts will stick. Put
each one in a candy paper cup. It takes a little practice to get the
caramel on the right thickness and temperature. Nuts need to be
finely chopped or they will not stick, the finer they are the better
they will stick.