Apple Affair Cake

1 pkg (2-layer size) yellow cake mix
1 pkg (4 serving size) Jell-O Vanilla or French Vanilla Flavor instant pudding and pie filling
1 cup water
4 eggs
1/3 cup vegetable oil
3 Granny Smith apples, peeled and coarsley chopped
20 Kraft caramels, unwrapped
1/4 cup milk

1. Preheat oven to 350 degrees. Grease and flour a 12-cup fluted bundt pan or 10-inch tube pan. Beat cake mix, dry pudding mix, water, eggs and oil in a large mixing bowl with electric mixer on low speed until blended. Beat on high for 2 minutes. Gently stir in apples. Pour into prepared pan.
2. Bake 50 minutes to 1 hour or until toothpick inserted into center comes out clean. Cool 20 minutes; remove from pan. Cool completely on wire rack.
3. Microwave caramels and milk in bowl on high 1 1/2 minutes, stirring every 30 seconds until well blended. Cool 10 minutes until slightly thickened. Drizzle over cake.