The new bakery in San Carlos, Sterntaler Bakery, started by a German couple I believe, brings heavenly baked goods to the area. Try the antastic rustic cakes with a fresh fruit filling (plum or peach are the best!) and the butter-sugar streussels on top or go for the Bavarian-style pretzels. They have the pretzels even as sticks with cheese topping. You cannot go wrong with any of the products really. All is really different and really, really good.
They sell at the San Carlos Farmer's market on Thursdays and the Redwood City Farmer's market on Saturdays and various other locations.