PREPARE cake batter and bake as directed on package for 24 cupcakes; cool 10 minutes.
MEANWHILE, measure 1/4 cup of the dry gelatin into small bowl. Stir in 1/2 cup of the boiling water 2 minutes until completely dissolved. Add cold water. Cut small "X" in center of each cupcake with sharp knife. Carefully pour gelatin evenly over cupcakes. Refrigerate at least 30 minutes. Meanwhile, stir remaining 1/4 cup boiling water into remaining dry gelatin in small bowl 2 minutes until completely dissolved. Cool.
BEAT butter in large bowl with electric mixer on medium speed until creamy. Gradually add sugar alternately with the gelatin, beating until well blended after each addition. (Add a small amount of hot water if the frosting is too stiff.) Spread frosting onto cupcakes. Store in refrigerator.