Unwrap caramels, place in a medium saucepan, add sweetened condensed milk.
Melt caramels over medium-low heat until caramels are completely melted, stirring constantly.
Hold one end of the pretzel rod, dip half of each pretzel rod into the hot caramel.
Spoon additional caramel over pretzel rod if necessary to coat evenly.
Stand pretzel rods upright in small squares of wire rack to set up.
Transfer milk chocolate chips into a microwave-safe bowl.
Microwave on high-power, stirring thoroughly every 15 to 20 seconds.
Repeat until chocolate is almost melted. (some pieces of morsels will be visible)
Remove from microwave and stir until smooth.
Dip caramel-coated end of pretzels into the melted chocolate; sprinkle with additional ingredients of your choice. Return to wire rack. When chocolate has harden, store in cellophane baggies.