Place sugar in a saucepan. Pour water around the sides of the pan. Make an X with your finger across the sugar. Cook over medium-high heat, swirling the pan, until the mixture turns a caramel color. Remove from the heat, add the butter carefully as it will bubble up, add popped corn, and toasted nuts. Pour onto a silicone baking mat or foil lined cookie sheet. Break into clusters while still warm.
To make popcorn on the stove: put 2 to 3 tablespoons oil in a large pot with high sides, and add 1 kernel of corn. Heat oil over medium-high heat until the kernel pops. Add 1/3 cup corn kernels and shake pan continuously until all the kernels are popped.
Recipe courtesy Gale Gand, "Gale Gand's Short and Sweet" by Gale Gand and Julia Moskin, Clarkson N. Potter Publishers, 2004