Toast coconut according to package directions. I use sweetened coconut flakes. Set aside to cool.
Melt caramel bits with 1 tsp heavy cream in microwave, stirring every 30 seconds until smooth. Set aside.
In a large saucepan, heat butter, cream, sugar ans alt on medium high heat. Bring to a boil, stirring contantly. When it begins to boil, set timer for about 5 minutes, stirring continuously.
Remove from heat. Pour into a mixing bowl and using a stand mixer whisk together the pudding mix, white chocolate and marshmallow fluff until combined (and chocolate is smooth).
Immediately pour into a parchment paper lined 13x9 baking dish.
Pour caramel over top of fudge (it will be thick). Use a knife to spread and swirl it into the fudge (don't worry if the top of the fudge looks bumpy).
Refrigerate fudge for 2-3 hours until set.
Melt semi sweet morsels. Spread over set fudge and sprinkle generously with toasted coconut. Cut into bites and enjoy. Store in covered container in refrigerator.