Got this off The Pioneer Woman's comment section:
Homemade Sweetened Condensed Milk
Just 4 simple ingredients in the blender and you have it in 1 minute flat.
This makes the equivalent of one can Eagle Brand or the like.
1 cup dry powdered milk (I use nonfat)
2/3 cup granulated sugar
1/3 cup boiling water
3 Tbsp. melted butter
Mix in the blender. DONE!
For homemade caramel
1 Take can of sweetened condensed milk and remove label. (Do Not Open).
2 Place in a 3-1/2 to 4-1/2 quart crock pot.
3 Pour water in crock pot until the can is completely covered with water. You only need water to be 1/4 in over the top of can.
4 Put lid on crock pot.
5 Heat on high for 3-1/2 to 4-1/2 hours (the longer the milk cooks the darker the caramel will be).
6. Keep the water replenished, do not let it boil dry.
7. At desired time remove can with tongs (Be careful the can will be very hot).
8. Allow to cool to the point that you can touch the can, but the can will be still warm.
9.Open can and pour contents into a bowl that has a good sealing lid.
10 Stir in the vanilla extract.
11 At this point you are ready for dipping.
12 Any leftovers can be placed in the refrigerator.