Combine all of the BBQ sauce ingredients in a food processor and blend until smooth; transfer the mixture to a sauce pan and simmer over medium heat, skimming off foam until the sauce has reduced to desired thickness. Store in the refrigerator.

Combine onions with the ground beef, yellow mustard, garlic powder, liquid smoke, salt and pepper. Form into 1 inch meatballs.

In a frying pan over medium heat, spray with oil and add the meatballs; cook until they start to brown on all sides. Drain the liquid from the pan.

Add 1 cup of the BBQ sauce and grape jelly; allow sauce to combine and coat meatballs.