Preheat oven to 325 degrees F. Grease and flour bundt pan. Sprinkle chopped nuts over the bottom of the pan.

Combine cake mix and pudding mix. Mix in the eggs, 1/2 cup water, oil and 1/2 cup rum. Blend. Pour batter over chopped nuts in the bundt pan.

Bake for 60 minutes, or until a toothpick inserted into the cake comes out clean. Let cool for 10 minutes in the pan. Pour glaze onto the cake and wait for it to be absorbed. Then turn the cake out onto plate and brush glaze over top and sides. Allow cake to absorb glaze and repeat until you use all of the glaze.

In a saucepan, combine butter, 1/4 cup water and 1 cup sugar. Bring to a boil over medium heat and continue to boil for 5 minutes, making sure to stir constantly. Remove from heat and stir in 1/2 cup rum.