Special equipment: A large sheet pan with sides, about 13 by 17 inches Parchment or waxed paper A 2-inch (approximately) round biscuit or cookie cutter
Heat the oven to 350 degrees F. Grease a sheet pan and line the bottom and sides with parchment or waxed paper.
Sift together the 3 cups sugar, flour, cocoa, baking powder, baking soda, and salt. Transfer to a mixer fitted with a whisk attachment (or use a hand mixer) and blend briefly.
Whisk together the eggs, milk, oil, and vanilla extract in a medium bowl. Add to the dry ingredients and mix at low speed for 5 minutes. Gradually add the hot water, mixing at low speed just until combined. The batter will be quite thin.
Pour the batter into the pan. Bake until a tester inserted in the center of the cake comes out clean (a few crumbs are okay) and the center feels firm to the touch, 25 to 30 minutes. Let cool in the pan. Chill, covered, until ready to cut the cake.
Meanwhile, make the caramel: Pour the 1 1/4 cups sugar into the center of a deep saucepan. Carefully pour the water around the walls of the pan, trying not to splash any sugar onto the walls. Do not stir; gently draw your finger twice through the center of the sugar, making a cross, to moisten it. Over high heat, bring to a full boil and cook without stirring, swirling the pan occasionally to even out the color, until medium caramel in color, 5 to 10 minutes. Immediately turn off the heat and use a wooden spoon to slowly and carefully stir in the cream (it will bubble up and may splatter). Stir in the macadamia and coconut. Set aside.
When ready to serve, cut rounds of the chilled cake with a biscuit or cookie cutter, 2 to 3 inches in diameter. If the cake seems to be sticking, dip your cutter in cocoa powder between cuts.
If the sauce has cooled, rewarm it over low heat (or in a microwave) until softened. Place a cake on each plate, and drizzle with caramel sauce. Place another round of cake on top and drizzle lightly with more caramel sauce.
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