Combine water and sugar in a medium sauce pan and cook to 234°F (the sugar will still be clear at this point)
Remove from heat and add pine nuts.
Stir continuously and quickly to coat all nuts with sugar; they will begin to crystallize and should separate rather than clump.
Place the pan back over medium heat and stir continuously. This will toast the nuts as the sugar begins to caramelize (this is when the sugar begins to look amber like the picture below).
Add butter to the nuts once the sugar has caramelized and coat evenly.
Pour the caramelized pine nuts out onto a silicone baking mat and spread out, separating them into individual pieces or small groupings as much as possible while they cool.
Once cooled, chill in the refrigerator for 5 minutes.
Remove from refrigeration and place in a plastic ziplock bag, then crush with a rolling pin.