Heat oven to 350 degrees and line a 12-cup cupcake pan with paper liners. Set aside.
Combine flour, sugar, cinnamon, baking powder and salt in a large mixing bowl and stir with a whisk.
In a separate small bowl, add milk, butter, egg and vanilla and whisk together.
Pour wet ingredients into dry and stir just until combined. Stir in apple chunks and caramel chunks.
Divide batter evenly into your prepared cupcake muffin pan. They will be nearly full. Bake for 20-25 minutes or until tops spring back when lightly pressed.
For cinnamon & sugar topping. Place melted butter in one bowl and stir together sugar and cinnamon in another bowl. Once muffins have cooled for about 5 minutes, dip each one in the butter and then immediately into the cinnamon-sugar.
If you really want to take these over the top then fill each muffin cup half full, place a piece of caramel, and then fill the rest of the muffin cup with batter. That way you're sure to get a nice gooey piece of caramel in each bite.
Make sure you also cut your apple into small chunks. If the apple pieces are too big they will stay slightly crunchy. I aim for the size of peas or corn. So they should be fairly small chunks.
I use the square Kraft caramels. You can find them in the candy aisle with the other bagged candy. I have also seen caramel bits by the chocolate chips, those should work just fine and you would not even have to cut them.