Drain cherries, reserving juice. Set cherries aside. Add enough water to juice to equal 1-1/4 cups. In a saucepan, combine sugar and cornstarch. Stir in juice. Bring to a boil; cook and stir for 2 minutes or until thickened.
Remove from the heat. Stir in the butter, vanilla, cherries and food coloring if desired. Serve warm over cake or ice cream.