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Put the flour in a large shallow bowl and make a well in center. Add water, sour cream, egg, oil, and salt to well and carefully beat together with a fork without incorporating flour.
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Mix in the flour gradually to make a soft dough. On a flat surface knead the dough until elastic, about 8 minutes. Invert a bowl over dough and let stand at room temperature 1 hour.
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Meanwhile, peel and cook the potatoes in a large saucepan until tender, about 10 minutes.
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Sweat the diced onion until soft, about 10 minutes.
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Mash the potatoes and add the cheese, onion, milk, chives, garlic, and salt.
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Halve dough and roll out 1 half on lightly floured surface.
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Cut out 22 rounds with lightly floured 3 inch diameter cutter.
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Form a small ball of the potato filling and place in the center of the dough round and close your hand to fold round in half.
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Pinch edges together to seal completely. Seal by pressing with the tines of a fork to create ridges.
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Bring a large pot of water to boil. Add half of pierogi, stirring once or twice to keep them from sticking together, and cook until the pierogi float to the surface, about 5 minutes
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Transfer with a slotted spoon to onion topping and toss gently to coat. Cook remaining pierogies in same manner, transferring to onions. Reheat pierogies in onion topping over low heat, gently tossing to coat.
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For the onion topping, cook the onion in butter stirring until golden brown, about 30 minutes. Remove from heat and set aside.