Combine caramels, water, and 2 teaspoons margarine or butter into a 4 cup liquid measuring cup.
Micro-cook, uncovered, on 100% power (high) for 1 1/2 minutes.
Use a rubber scraper to stir till smooth.
If caramels aren't soft enough to stir smooth, micro cook for 30 to 60 seconds more.
Put the popcorn into a large microwave safe mixing bowl.
Pour the melted caramel mixture over the popcorn.
Use 2 rubber scrapers to toss gently till popcorn is coated with caramel.
Rub a little margarine or butter onto your hands.
Shape the pop corn into 8 medium size balls, putting balls onto waxed paper lined baking sheet after shaping.
If the caramel corn gets too cool to stick together while shaping, micro cook, uncovered, on high for 30 sec onds or till caramel mixture is sticky again.
Note: Substitute 6 cups popped popcorn and 1 cup granola or other ready to eat cereal for the 7 cups popped popcorn, if desired.