Combine water and sugar in a medium saucepan. Bring to a boil over medium heat. Add remaining ingredients; return to a boil. Reduce heat and simmer 15 minutes or until apples are tender. Pour into a medium glass mixing bowl. Place a piece of plastic wrap directly on sauce. Cool to room temperature and refrigerate overnight to allow flavors to blend. Best if served at room temperature. Makes about 2 1/2 cups.