For the cupcakes:
Preheat oven to 350F. Line a 12-cup muffin tin with paper liners.
In a large mixing bowl, cream together butter and sugars until light and fluffy. Beat in egg, followed by vanilla extract.
In a small bowl, whisk together flour, baking soda, baking powder, salt and spices. Add one third of this mixture to the butter mixture, stirring to incorporate, followed by half of the applesauce. Repeat with the rest of the flour and applesauce and mix only until no streaks of flour remain in the batter. Fold in diced apples. Divide evenly into prepared muffin cups, filling each about ⅔ full.
Bake for 15-18 minutes, until the muffins spring back when lightly pressed and a toothpick inserted into the center comes out clean. Remove from pan and cool on a wire rack.
When cooled completely, fill cupcakes, using the cone method, with dulce de leche (recipe follows). Frost with cream cheese frosting (recipe follows) and top with a pecan.
For the dulce de leche filling:
Preheat oven to 425 degrees F.
Open up the can and pour the sweetened-condensed milk into a pie pan. Cover tightly with foil. Place into a larger pan and pour boiling water in larger pan & around pie plate (level of water should be about halfway up the pie plate). Don’t let any water seep up and into the pie plate.
Place in oven and bake for 1 hour. At the one hour point, peel off foil and check for progress. If the mixture has thickened and turned a caramelly color, it’s done. If it doesn’t quite look thick enough or dark enough, cover it up and bake it a little longer (mine took 75 minutes).
When the mixture appears to have turned into a nice, thick caramel, remove from the oven. Let sit for a few minutes, and then beat with an electric mixer until smooth.
Use leftovers for coffee or ice cream!
For the cream cheese frosting:
In a large bowl, on the medium speed of an electric mixer, beat the cream cheese and butter until smooth, about 3 minutes. Add the vanilla and beat well. Gradually add the sugar, ½ cup at a time, beating continuously until smooth and creamy. Cover and refrigerate icing for 2 to 3 hours, but no longer, to thicken before using. Frost cupcakes then top each cupcake with a pecan.