Heat oven to 350°F. Line 48 small muffin cups (1-3/4 inches in diameter) with paper or foil baking cups.
Beat butter, sugar, water and vanilla in large bowl on medium speed of mixer until well blended. Add eggs; beat well.
Stir together flour, cocoa, salt and baking soda. Gradually add to sugar mixture, beating on low speed just until blended. (If necessary, refrigerate dough until firm enough to handle.) Shape dough into 1-inch balls; place in prepared muffin cups.
Bake 11 to 13 minutes or until cookie surface is set. Cookies will appear soft and moist. Do not overbake. Cool about 5 minutes on wire rack; dust with powdered sugar. Press mini peanut butter cup at an angle into surface of each cookie cup. Cool completely in pan on wire rack.
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