In a saucepan over medium high heat, cook the sugar until it starts to melt on the bottom. During this step, you need to stir it pretty continuously so it doesn't burn. While stirring, the sugar will stick together and form hard clumps/shards.
At this point, you don't have to stir AS much because you want the sugar to get hot enough to melt and turn a golden brown color. So stir the sugar, give it a moment, and then stir again. And when I say "moment," I don't mean walk away and come back. Just stand there and give it a second. Then stir again, repeating this process until all the clumps are melted and the sugar has turned golden brown. Reduce heat to medium.
Stirring continuously with one hand, add the butter with the other. Because the butter is colder than the caramel, the mixture will bubble and sizzle quite a bit. But just keep stirring!
Once all the butter has completely melted, still continuously stirring, slowly pour in the Kahlua. The mixture will sizzle even more than before. I kind of added a little Kahlua, stirred until it stopped sizzling, added some more, and so on until all the Kahlua was added.
After you've added the Kahlua, let the mixture simmer for 1 minute. It will bubble up and double in height. Stand at the stove and watch to make sure it doesn't boil over.
Remove the pot from heat and stir in salt. Let the caramel sauce cool before using. Store in a jar or sealed container in your fridge. Warm up the caramel again before using.