Preheat oven to 250 degrees F. Grease a 10-1/2 x 15-1/2-inch jellyroll pan.
In a large bowl, combine nuggets, cereal and nuts. Place caramels and water in medium heavy bottomed saucepan. Cook over low heat, stirring frequently, until smooth. Pour caramel mixture over mixture; stir until well coated. Spread mixture evenly in prepared jellyroll pan. Bake 1 hour, stirring every 15 minutes.
Spread on greased aluminum foil to cool. Break into pieces, and store in an airtight container.