Prepare a baking sheet with parchment paper or a silicone mat, put the cereal in a large bowl, unwrap the caramels, and secure a toothpick or skewer in each marshmallow. The sheet and cereal will be ready as soon as the coating becomes sticky.

Combine the caramels, sweetened condensed milk, and butter in a medium saucepan over medium heat, stirring constantly for about 8 to 10 minutes. The mixture is ready when no caramel pieces remain and it looks smooth, creamy, and glossy.

Take the saucepan off the heat and leave the caramel undisturbed for about 2 to 3 minutes. It should still coat a marshmallow easily without being hot enough to make the center soften and slip.

Dip one marshmallow, turn it to cover the surface, tap off the extra caramel, and roll it in the cereal immediately. The cereal should cling to the tacky coating before a skin forms.

Transfer the coated marshmallow to the prepared sheet and gently rotate the toothpick as you pull it free. The ball should keep its shape without the coating lifting away.

Leave the balls at room temperature for about 30 minutes before serving or putting them away. The caramel should feel set enough to handle without sticking heavily to your fingers.