Prepare all your caramel squares for dipping by sticking the toothpicks or candy stick into their center. 

Line a baking sheet with parchment paper. 

Pour your chocolate chips into the melting pot and set it on medium heat so that you get your chocolate melting.

If you do not have a chocolate melting pot you can also melt the chocolate in a double boiler over the stove or in the microwave. 

While chocolate is melting, unwrap candy canes, place them in a ziploc bag and use a rolling pin to smash them into small pieces. Place the candy cane pieces in a bowl for topping.

As soon as all the chocolate chips are melted, begin dipping your caramel squares. 

Place the squares onto the parchment paper and wiggle the sticks out of the caramel before it hardens. 

As soon as you place each caramel on the paper, top it with candy cane pieces and lightly press them into the chocolate.

Allow caramels to harden. 

Peel them away from the parchment paper and store in an airtight container.