In a small saucepan over medium high heat, combine ingredients. Stir to dissolve sugar and bring to a boil.
Reduce heat and simmer for about 10 minutes, stirring occasionally. Cranberries will burst to release juices; once they are soft you can mash further with a potato masher, if you like.
Pour sauce into a container and let cool. Sauce will thicken further as it cools. Store in the refrigerator for up to two weeks.