I've used this palm sugar caramel recipe before without problems. It uses about 25% honey as well as the sugar.
- 17oz palm sugar
- 4.25 oz Honey
- 14 oz heavy cream
As soon as the sugars get to 320 ℉ (160 ℃), take the pan off the heat and deglaze it with the cream. If you let it sit on the heat any longer, it will burn. After adding the cream simply cook it again until it reaches 250 ℉ (122 ℃). Then, remove it from the heat, pour it into your prepared form, and let it cool to room temperature.
The classic way to make a caramel sauce is to cook approx (this is what we use at the restaurant, because sometimes we get distracted and have to run away; it's more forgiving. Use less water if you can concentrate) 4:1 sugar:water until the sugar has taken a golden colour. Remove from heat, whisk in cream and butter until you reach your desired consistency, add a pinch or two of salt, just enough so you can taste it. This will get you a nice caramel sauce, keeps a week or so at room temp.
Edited to respond to question:
Honestly, I have no idea what the ideal ratio is. I just do it by feel. There should be a zillion caramel recipes available via google that can be more specific. Offhand I would kind of sort of guess that for three cups sugar I use roughly 3/4c cream and 3tbsp butter. Ish.
Edited to provide another answer:
If you wish to use condensed milk to create something that will be closer to a dulce de leche, do the following. This can be extremely dangerous, please be sure to follow all directions. I am not responsible if you injure yourself:
Fill a large pot with water. Keep another pot boiling for topping off the main pot as water evaporates.
Place a can of condensed milk, still sealed, label removed, into the main pot. Bring up to a hard rolling boil. Top up the water as needed. Ensure that the can is always covered with at least six inches of water. Keep a lid on the pot, just in case.
Boil hard for four hours. Turn off the heat, and allow the water in the pot to come slowly down to room temperature. Do not at this point touch the can.
After cooling, let the pot continue to sit at room temperature for at least one hour. At this point, reach into the pot and gently touch the can with your hand. If it is still warm, leave it to cool further.
Once the can is completely cooled to room temperature, you may open it. If you want to be sure, leave it overnight.
You will have a glorious caramel sauce.
Note: I have intentionally described this process with significant margin for error for safety. There will be significant pressure inside the can, and opening it prematurely can very easily result in life-altering injuries.
Best Answer
You make small amounts the same way you make large amounts: dry or wet, doesn't matter, take your preference.
The problems you have are related not to the method, but to the wrong vessel. For example, for the dry method, you have to have the sugar neither too thick, nor too thin. For small amounts of caramel, you have to go with a small pot, possibly go down to 12 or even 8 cm (at least that's what works for me; if by "tiny" you really mean something like a tablespoon of caramel sauce, you might have to use a tiny vessel, like a muffin tin or a single portion cezve). The other desired quality is to have a vessel which provides even, measured heating, so a thick heavy bottom is always preferable.
Also make sure to use the right temperature, "sugar gets burned while the rest is still dissolved" sounds like you might be using too high heat.