Begin by peeling, coring and grating apples into a large bowl. You should yield approximately 2 cups. Into the apples, stir in milk, eggs, and vanilla. Slowly stir in all dry ingredients until combined.
Heat a large skillet over medium to medium-high heat. Grease liberally with butter. Drop batter by 1/4 cup onto the hot surface. Once edges have browned, flip to cook the other side (just like making pancakes). Remove pancakes to a plate and cover with foil. Re-grease the pan with more butter and repeat until all the batter is cooked.
Caramel Syrup
To make the warm caramel sauce, melt butter and sugar together over medium heat while stirring occasionally. Let the mixture simmer lightly until it starts to bubble and look foamy. Cook like this for 3-5 minutes.
Stir in milk, salt, and vanilla. Turn burner off, but leave caramel sauce on the hot stove until ready to serve. Pour into a serving dish and serve with the apple pancakes.