COMBINE cereal, popcorn and nuts in large microwaveable bowl; set aside.
PLACE caramels, butter and water in medium microwaveable bowl. Microwave on HIGH 2 to 3 min. or until caramels are completely melted and mixture is well blended, stirring after each minute.
DRIZZLE over cereal mixture; toss to coat. Microwave 2 min., stirring after each minute. Cool completely. Break into clusters.