Wash and dry apples. Remove stems. Insert 1 wooden stick into the stem end of each apple. Place apples on a buttered baking sheet. Place chopped nuts, pretzels, or granola in a shallow dish, if using; set aside.
In a heavy medium saucepan heat and stir the caramels and water over medium-low heat just until caramels are melted. Remove saucepan from heat. Stir in cinnamon oil, chocolate pieces or peanut butter.
Working quickly, dip each apple into hot caramel mixture, spooning caramel evenly over apple. (If necessary, add hot water, 1 teaspoon at a time, to caramel mixture to make of dipping consistency.) To remove excess caramel, scrape off bottom of apple with a metal spatula. If desired, dip bottoms into peanuts, pretzels, or granola. Set apples on prepared baking sheet and let stand about 30 minutes or until firm. Makes 10 dipped apples.