Preheat oven to 350 degrees F.
Carmelize* the sugar and cover the bottom of a greased oven-proof pan.
Beat eggs and vanilla and mix in milk.
Pour into the prepared pan.
Place the pan in a larger pan. Fill the larger pan with water to as high up on the pan with the flan mixture as possible.
Bake 45 to 60 minutes until a knife inserted into the flan comes out clean.
Cool. Use a knife to separate the edge of the flan from the pan and remove from pan onto a plate. Serve cold.
*I use about a cup of sugar with a tablespoon or so of water in a non-stick pan on medium heat. It must be stirred constantly. It's slow at first but once the sugar starts to color, it just take a minute or two to turn dark and it continues to darken after you take it off the stove. I shoot for a color about the same as a good maple syrup.
After I've coated the pan I'm using for the flan, I save the rest of the burnt sugar for a pie.