Step 1: Cook cipolline in medium saucepan of boiling water 3 minutes. Drain; rinse with cold water and peel. (Can be prepared 1 day ahead. Cover and refrigerate.)
Step 2: Melt 2 tablespoons butter in large skillet over medium heat.
Step 3: Add potatoes; stir to coat. Cover skillet; cook potatoes until golden and almost tender, stirring occasionally, about 25 minutes.
Step 4: Mix in cipolline. Cover; cook until cipolline and potatoes are tender and golden, stirring occasionally, about 20 minutes longer.
Step 5: Mix in dill and 1 tablespoon butter.
Step 6: Season with salt and pepper.
Step 7: Transfer to bowl.
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