In a large mixing bowl, cream butter and sugar until fluffy 2-3 minutes.
Add egg yolk, milk and vanilla and mix well. Add dry ingredients and mix just until combined.
Wrap dough in plastic wrap and refrigerate for one hour.
When ready to bake, adjust oven racks to upper and lower middle positions. Preheat oven to 350 degrees. Line two baking sheets with parchment paper. Unwrap caramels.
In a small bowl, whisk egg yolk until frothy. Place chopped pecans in separate bowl.
Roll dough into 1-inch balls, dip in egg white and roll in pecans. Place balls 2 inches apart on baking sheets.
Using a 1/2 teaspoon measuring spoon, make an indentation in each cookie. Bake until set, about 12 minutes, rotating and switching baking sheet positions halfway through baking time.
While cookies are baking, microwave caramels and cream until smooth, 1-2 minutes, stirring occasionally.
Once cookies are baked, remove from oven, repress indentations and fill with 1/2 teaspoon caramel.
Cool on sheets for 2-3 minutes before moving to rack to cool completely.
Store cookies in an airtight container. These are best eaten in 1-2 days.