In a medium-sized saucepan over medium heat, mix butter, evaporated milk and two cups of sugar.
Heat and stir until sugar dissolves. Do not allow to come to a boil. Reduce heat to low.
In a small cast iron skillet on medium-low heat, melt the remaining half cup of sugar – stirring constantly until liquid and brown.
The sugar will crystallize about halfway through the process. Just keep stirring until it completely melts.
Pour the browned sugar into the saucepan and quickly stir to incorporate.
Stir regularly until the liquid reaches the soft ball stage, 235 F (113 C).
Remove from the heat and stir in the vanilla.
Wait ten to fifteen minutes and then dip, spread, or pour on your favorite baked goods.