PREHEAT oven to 350°F. Grease and flour 12-cup fluted tube pan or 10-inch tube pan. Beat cake mix, dry pudding mix, water, eggs and oil in large bowl with electric mixer on low speed until blended. Beat on high speed 2 min. Gently stir in apples. Pour into prepared pan.
BAKE 50 min. to 1 hour or until toothpick inserted in center comes out clean. Cool 20 min.; remove from pan. Cool completely on wire rack.
MICROWAVE caramels and milk in microwaveable bowl on HIGH 1-1/2 min., stirring every 30 sec. until blended. Cool 10 min. until slightly thickened. Drizzle over cake.