Step 3Caramelize the sugar
To caramelize the sugar, mix the 1/2 cup of sugar and about 1/2 cup of water in a pot. The sugar will dissolve easier as you heat the mixture, so don't try to mix it before setting it on the stove. Basically just keep stirring the mix as it heats up even once its mixed. It will start boiling and bubbling and will require much more frequent stirring. I guess there is a fine line between making caramel and making candy, but it will all dissolve into the coffee anyway. Its tough to tell when enough is enough (ok, I'm not a professional caramelizer), but you'll notice eventually that the stuff is thickening. Thats probably a good point to add it to the coffee. Don't heat up the coffee to blend the caramel in. You don't want to burn the coffee.
Like I said, its difficult to determine the point of caramelization because you are stirring while hot when the stuff tends to flow the best.
Uhh, I guess I looked it up, and this is not the way to make caramel. Its the way I made it for the liqueur, so I'm going to leave it until I try differently. There isn't an instructable that gets at it, but Wikihow suggests just melting sugar.
http://www.wikihow.com/Make-Caramel
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Nothing usually happens for the first minute or two, then pow, it's burnt. you have been warned.