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Mix sugar and pectin. Slowly add cool water, stirring until smooth. Heat just to boiling point and add to sugar mixture. Cook rapidly to 220 degrees F.
Add applesauce and cook to 224 degrees F.
In a separate bowl, combine citric acid or citric acid plus boiling water. Stir until just dissolved. Add to cooked candy. Fold in nuts. Pour into a buttered 9-inch square pan. Cool and cut. Roll each piece in sifted confectioners' sugar.