Preheat the oven to 350°F. Grease a 9.5" bundt pan. In a shallow bowl, combine the sugar and cinnamon. Set aside.
In a medium bowl, whisk the flour, baking powder, and salt together. Add the butter and stir to combine. Stir in the milk. Transfer to a stand mixer fitted with the hook attachment and knead for about 3 minutes.
Transfer the dough onto a lightly floured surface and knead with your hands for another 1-2 minutes. Break off 2" pieces of dough and use your hands to press together into a slightly flattened mound. The pieces should resemble gnocchi in shape. Roll each piece in the cinnamon sugar mixture.
In a medium bowl, gently toss the pieces of dough with the diced apples and caramel sauce. The dough may still be slightly crumbly, so it's important to be gentle. Transfer the mixture to the bundt pan and spread evenly. Bake for 45-50 minutes, or until the dough is slightly golden in color. Allow to cool in the pan for 10 minutes before inverting onto a plate.