In a saucepan over medium heat, melt the sugar until it turns golden brown. Quickly pour it into a baking dish, tilting to coat the bottom evenly.

In a blender, combine sweetened condensed milk, evaporated milk, eggs, and vanilla extract. Blend until smooth.

Pour the flan mixture over the caramel in the baking dish. Place the baking dish in a larger pan filled with water (water bath) and bake at 350°F (175°C) for about 60 minutes, or until set.

Remove from the oven and let it cool. Refrigerate for at least 4 hours before serving. To serve, invert onto a plate to let the caramel sauce drizzle over the flan.