in large bowl combine cereal and dried apples, set aside.
combine caramels with milk and butter in large microwaveable bowl. microwave uncovered on high power for 3 minutes. stir and cnotinue to microwave until mixture is bubbling about 1 minute longer. stir well and pour over cereal mixture. stir mixture thoroughly until evenly blended.
put decorating sugar in small bowl and have another bowl of warm water nearby. with wet hands, shape warm caramel rice mixture into 16 balls, about 2 inches in diameter wetting hands again as needed. roll each ball in sugar until well coated.
make small depression in each apple. break pretzel sticks into short pieces and insert 1 in each apple using it to secure leaf as well. set apples aside to firm up, about 1 hour.