1 loaf (16 oz) egg bread, such as challah, sliced in 1-in cubes (about 12 C. cubes)
3 red baking apples, such as Jonathan, peeled and chopped
1 t. lemon zest
1 T. fresh lemon juice
1 T. butter
2 C. plus 1 T. milk, divided
1 C. heavy whipping cream
6 eggs, lightly beaten
1/2 C. firmly packed brown sugar
1 t. double-strength vanilla
1/4 t. salt
1 pkg. (14 oz) caramels (about 48), unwrapped
1/2 C. toasted pecan halves, coarsely chopped
Preheat oven to 350. Lightly spray a covered baker with vegetable oil with a spritzer. Melt butter in 10-inch skillet. Add apples, lemon zest and juice; cook and stir 3-4 minutes or until apples are softened.
Meanwhile combine 2 C. milk and cream. Microwave on high 2-3 minutes or until hot. In mixing bowl, combine eggs, brown sugar, vanilla and salt; mix until well combined. Gradually add milk to eggs while continually whisking. Gently stir bread cubes into milk mixture; toss gently to coat.
Place caramels and remaining 1 T. milk into a microwave safe bowl. Microwave, uncovered, on high 1-2 minutes or until melted and smooth, stirring after each 30-second interval. Set aside 1/4 C. of the caramel mixture. To assemble bread pudding, place half of the bread into the prepared baker. Top with half the apples and drizzle with remaining caramel. Top with remaining bread mixture and apples. Cover and bake until thermometer reaches 155 F in center. Let stand in turned off oven 10 minutes. Temperature will rise until at least 160 F. Uncover baker and drizzle with reserved caramel. Sprinkle chopped pecans over bread pudding.