Caro-Kann variation 1.e4 c6 2.d4 d5 3.Nc3 dxe4 4.Nxe4 Nd7 5.Ng5 I would like to play the Modern Variation of the Caro-Kann. What is the best way to deal with Ng5? Best strategy and known tactics (e.g. the Ne6 sacrifice). Maybe you can recommend a book dedicated to this variation?

[FEN ""]
1.e4 c6 2.d4 d5 3.Nc3 dxe4 4.Nxe4 Nd7 5.Ng5
EDIT ( December, 30 2013 ):


Removed unnecessary book from the list 
Added explanation of basic ideas in response to the comment made by member Jonathan Garber



  I would like to play the Modern Variation of the Caro-Kann. What is the best way to deal with Ng5? Best strategy and known tactics (e.g. the Ne6 sacrifice).


You did not specify which side you wish to play, but I have assumed it is Black side you are interested in, judging by the sentence "What is the best way to deal with Ng5?".

The only dangers that I see are the move Bc4 and Bd3 coupled with Ng5, since there is always the possibility of the sacrifice on e6.

When playing Bc4, White hopes for something like this:

[FEN ""]
1.e4 c6 2.d4 d5 3.Nc3 dxe4 4.Nxe4 Nd7 5.Ng5 Ngf6 6.Bc4 e6 7.Qe2 h6? 8.Nxf7!


This is the place where you play 7. ...Nb6 and White can reply with 8.Bd3 or 8.Bb3.

After 8.Bb3 you play 8. ...h6 and then strike with 9. ...c5. The remaining variations are not that theoretical, and you need to remember some key moves to secure equal chances. 

The trap in the above diagram was the only critical position requiring from you to play precise and theoretical move.

The Bd3 continuation is different. Here White has more opportunities for positional sacrifices, since he gets the compensation in view of space advantage, pressure on the Black king stuck in the center and the lead in the development.
This is the place where you must know theory and always take care in first 10 or 13 moves.

[FEN ""]
1.e4 c6 2.d4 d5 3.Nc3 dxe4 4.Nxe4 Nd7 5.Ng5 Ngf6 6.Bd3


If you play 6. ...h6?! here White can respond with 7.Ne6! and will just calmly develop, sacrificing the knight since he gets very good compensation in view of the initiative, development lead and Black's cramped, uncoordinated position.

Another dangerous variation with White's same idea is this:

[FEN ""]
1.e4 c6 2.d4 d5 3.Nc3 dxe4 4.Nxe4 Nd7 5.Ng5 Ngf6 6.Bd3 e6 7. N1f3 h6?! 8.Nxe6!


Instead of 7. ...h6?!, Black plays 7. ...Bd6 and from here on, you really must know theory, as I have mentioned before, since things get really messy. Note that it is harder to play this variation with Black, than with White, but the resulting position is unclear and sharp, so you both have equal chances.


  Maybe you can recommend a book dedicated to this variation?


As someone who used to played this defense as Black in tournament games, I can recommend you some books that helped me to learn to play this opening variation with good success:


Joe Gallagher-Starting Out The Caro-Kann
Anatoly Karpov and A.Beliavsky-The Caro-Kann in Black and White
Shandorff Lars-Grandmaster Repertoire 7-The Caro-Kann


Start reading them in order I have presented above.

The first one will help you to grasp basic ideas and concepts of the variation you seek, but will also help you with other variations as well-which is important since generally in Caro-Kann it is White who can steer the game, not Black. You will find the answers you seek in this book. I have just given you the small summary of ideas in the above section.

Once you learn the basics you can move on to the second book, written by a grandmaster who practically reinvented the whole variation for Black. It is Karpov who first used that variation in the candidate matches. That is why he had to do everything almost from scratch, and that is why I believe that this book will be the most useful to you. You will learn from one of the best players in chess history and who can better explain to you the ideas for Black than the one who invented them? This book will show you the annotated games where White or Black played well, and their opponent bad. It is important for you to know what is good for White and what is good for Black in the variation you wish to master.

After you learn the opening moves, and grasp the middle game that arises from it, you will start to improve rapidly, since the opening is very solid and hard to "crack" on the lower levels of skill. Naturally you will want to play for a win. In order to do so, you will need the sharpest and most precise continuations and that is what third book should help you with.

A SMALL ADVICE:

Get a good book on endgames, you will need it.

Hopefully this will help you.

Best regards.