Line a 13-in. x 9-in. baking pan with foil; butter the foil with about 1 Tbsp butter. Sprinkle with pecans and chocolate chips; set aside.
In a heavy saucepan, melt the one cup of butter over medium heat. Add brown sugar, corn syrup and water. Cook and stir until mixture comes to a boil. Stir in sweetened condensed milk. Cook, stirring constantly, to firm ball stage (248 degrees).
Remove from heat and add vanilla. Pour into prepared pan (do not scrape saucepan).
Cool completely before cutting.
Notes
You're not supposed to scrape the saucepan, because grains of sugar on the side can cause your caramels to crystallize. But I couldn't just let all that caramel go to waste, so I scraped it into a small buttered custard cup. We ate it in like 5 seconds flat. Mmmm.
Make sure you used sweetened condensed milk, not evaporated milk. There is a huge difference!