In a microwave-safe 4-cup measure, place the 12 ounces candy coating. Microwave on 100% power (high) for 3 minutes or just until melted, stirring every 30 seconds.
Place toffee pieces, nuts, or nonpareils in a shallow dish. If desired, insert a skewer into each caramel. Dip one caramel into melted candy coating; turn to coat as much of the caramel as desired, allowing excess coating to drip off caramel. (If not using skewers, use a fork to lift caramel out of candy coating, drawing the fork across the rim of the glass measure to remove excess coating from caramel.) Place dipped caramel in toffee pieces, nuts, and/or nonpareils, turning to coat. Place coated caramel on a baking sheet lined with waxed paper. Repeat with remaining caramels. Let caramels stand about 1 hour or until coating dries.
If desired, microwave 2 ounces of a contrasting color of candy coating in a microwave-safe bowl on 100% power (high) for 2 minutes or just until melted, stirring every 30 seconds. Cool slightly. Transfer coating to a small, heavy plastic bag; cut a small hole in one corner of bag and drizzle additional coating over coated caramels. Let caramels stand until set. Makes 48 pieces.
To Store: Layer caramels between waxed paper in an airtight container; cover. Store at room temperature for up to 1 week or freeze for up to 3 months.
*If desired, substitute milk chocolate, dark chocolate, and/or white chocolate baking squares with cocoa butter for candy coating.