Baba's Cream Cheese Kolacky

1 bag (10 ounces) dried apricots
½ cup granulated sugar
2 sticks (1 cup) butter, room temperature
1 package (8 ounces) cream cheese, room temperature
2 cups flour
Confectioners sugar

Place apricots in medium saucepan; cover with water.
Soak overnight.
Heat the apricots and water to a boil in medium saucepan over high heat; reduce heat to low.
Simmer, stirring often with fork to mash and adding water if needed, until smooth and thick, about 10 minutes.
(If necessary, you can chop finely with a knife or process about 1 minute in a food processor or chopper.)
Add the granulated sugar, stirring until it dissolves. Cool completely.
Blend together the butter and cream cheese in a large bowl;
gradually blend in flour, using hands once the dough has begun to form, until it can be shaped into a ball
(this may be more or less than 2 cups).
Refrigerate 4 hours or overnight.
Heat oven to 350 degrees. Divide dough into thirds.
Roll out each third on a floured board into a 12-by-8-inch rectangle, 1/8 to ¼ inch thick.
Cut into 2-inch squares with a pizza cutter.
Place ½ to ¾ teaspoon of the apricot filling in the middle of each square.
Fold each corner into middle; pinch together. (Moisten fingers with cold water if dough does not stick.)
Place cookies on ungreased cookie sheets; bake until golden, about 17 minutes per batch.
Cool on wire rack; sprinkle with confectioners’ sugar.