Melt the butter in a medium sized sauce pan over medium high heat. Add the brown sugar, corn syrup and sweetened condensed milk. Stir it all together with a wooden spoon. Cook the caramel over medium high heat, stirring constantly. The temperature of the caramel should read 235-240 on a candy thermometer (soft ball stage) when it's ready. It should take about 14 minutes. If you don’t have a candy thermometer, you can just go with the recommended amount of time to cook the caramel and it should work well. Remove the pan from the heat and stir in the vanilla.
Use real white chocolate chips rather than the melties for this recipe... it will taste so much better. Use a double boiler, to melt the white chocolate chips and the butter (rather than using a microwave). It will help the white chocolate have a smoother texture.
*You can buy popsicle sticks cheaper in the craft section of most stores.