Dissolve sugar in water in sauce pan over medium heat. Add peanuts and continue to cook over medium heat, stirring frequently. Cook until peanuts are completely sugared. (Coated and no syrup.) Pour on ungreased cookie sheet, separate peanuts with a fork. Bake at 300° F. for approximately 30 minutes, stir after 15 minutes. Yields about 2-1/2 cups.