In a large mixing bowl, whisk together the flour, baking powder, and salt.
In a separate bowl, mix the applesauce, melted butter, egg, and milk until well combined.
Create a well in the center of the dry ingredients and pour in the wet mixture. Stir until just combined. The batter may be slightly lumpy. Gently fold the grated apples into the batter.
Preheat a skillet or griddle over medium heat. Lightly grease the cooking surface with butter or cooking spray.
Pour a small amount of batter onto the skillet for each pancake. Cook until bubbles form on the surface and the edges look set. Flip the pancake and cook the other side until golden brown.
Repeat with the remaining batter, adjusting heat as needed to prevent burning.
For the cinnamon apples:
Cut apples into chunks, leaving the skin on.
Steam the apple chunks in a small amount of water until slightly tender.
Add butter to the pan and melt.
Sprinkle ground cinnamon over the apples, salt and vanilla over the apples and coat completely.
Pan-fry the apple chunks, stirring occasionally, until they're golden brown and coated.
Notes
Store leftover pancakes in an airtight container in the refrigerator for up to 3 days. You can also freeze them by placing parchment paper between each pancake and sealing them in a freezer bag for up to 2 months.