Makes 3 layer 8-inch cake.

1/2 cup butter
1 1/4 cups granulated sugar
4 eggs
2 1/2 cups cake flour
2 teaspoons baking powder
1/2 teaspoon salt
1 cup milk
1 teaspoon vanilla extract

Frosting
3 cups granulated sugar
1 (12 fluid ounce) can evaporated milk
1 pinch salt
1/2 cup butter
1 teaspoon vanilla extract
1 cup chopped walnuts

Preheat oven to 350 degrees F (175 degrees C). Grease and flour three 8 inch round pans. Sift flour, baking powder and 1/2 teaspoon salt together and set aside.

Cream 1/2 cup butter and 1 1/4 cup sugar until light and fluffy. Add eggs one at a time, beating well after each. Add flour mixture alternately with milk. Add 1 teaspoon vanilla extract and beat until smooth.

Divide batter into three 8-inch pans. Bake at 350 degrees F (175 degrees C) for 25 to 30 minutes, or until a wooden pick inserted into cake comes out clean.

Caramel Nut Frosting: In a heavy saucepan, combine 3 cups sugar, evaporated milk and a pinch of salt. Bring to a boil and stir until sugar is dissolved. Lower heat and cook until soft ball stage. Stir with spatula to keep from sticking. Remove from heat and cool 5 minutes. Add 1/2 cup butter, 1 teaspoon vanilla extract and nuts. Beat until spreading consistency.