Make the Caramel: In a heavy-bottomed saucepan, melt sugar over medium heat until it turns into a deep amber caramel. Pour evenly into the bottom of six ramekins or a 8-inch round baking dish.
Prepare the Flan Mixture: In a blender, combine dulce de leche, eggs, milk, and vanilla extract. Blend until smooth.
Bake the Flan: Pour flan mixture over the caramel in the ramekins or baking dish. Cover with foil. Place the dish in a larger baking pan. Add hot water to the larger pan until it reaches halfway up the sides of the flan dish. Bake at 350°F (175°C) for 60-75 minutes, or until the flan is set but slightly jiggly in the center.
Cool and Chill: Remove from the water bath and let cool completely. Cover and refrigerate for at least 4 hours, or overnight.
Unmold and Serve: Run a knife around the edge of the flan. Invert onto a serving plate. Serve chilled.