Soften yeast in 1 1/2 cups warm water (110° to 115°).
Add milk powder, caraway, molasses, and 1 teaspoon salt.
Stir in rye flour.
Knead on floured surface till smooth (about 5 minutes).
Cut into 12 portions; roll each into a rope 15 inches long.
Shape into pretzels; place on greased baking sheet.
Moisten lightly with water; sprinkle lightly with coarse salt.
Bake at 425° till browned and crisp, 15 to 20 minutes