Peel and chop apples into slices. You can do cubes as well if desired.
Place chopped apples in a medium pot. Add water, sugar, and butter. Cook it over the stovetop for 15 minutes, occasionally stirring to prevent apples from burning or sticking in the base. Once apples are soft and caramelized, remove them from heat. Set them aside, covered, while making the hotcakes.
To make the hotcakes, beat the eggs in a medium bowl. Add sugar, vanilla extract, baking powder, salt, and ground cinnamon. Whisk to combine. Add milk and whisk again.
Add flour and stir well to combine. Mix to break any lumps the batter could have.
Cook hotcakes in a heated non-stick skillet with some melted butter on it. Cook them on both sides until they lift and turn slightly golden on top.
Serve hotcakes with the caramelized apples on top. Enjoy when still warm!