8 ounces German sweet chocolate or semisweet chocolate, chopped
2 teaspoons shortening
1 cup finely chopped pecans
In a double boiler, melt caramels in water. Dip half of each pretzel into the hot caramel. Place on a greased sheet of foil to cool.
In a microwave, melt chocolate and shortening; stir until smooth. Dip the caramel-coated end of each pretzel into the chocolate, allowing excess to drip off; sprinkle with nuts. Return to foil to cool.