Pour butter into a 13x9-in. baking dish. Combine bread cubes and apples; sprinkle over butter. In a large bowl, whisk the eggs, milk, sugar and vanilla. Pour over bread.
Bake, uncovered, at 325 for 40-45 minutes or until a knife inserted near the center comes out clean.
In a small saucepan, combine the sugar, cornstarch, salt and water until smooth. Bring to a boil over low heat, stirring constantly. Cook and stir for 1-2 minutes or until thickened. Remove from the heat; stir in butter and vanilla. Serve with warm bread pudding.
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