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PREHEAT oven to 375°F. Mix apples, 1-1/4 cups sugar, the cranberries, tapioca and cinnamon in large saucepan. Gradually add water, stirring until well blended. Bring to full rolling boil on medium heat, stirring constantly. Pour into 2-qt. baking dish. Dot with 2 Tbsp. butter.
COMBINE flour, 2 Tbsp. sugar, the baking powder and salt in large bowl. Cut in 1/4 cup butter until mixture resembles coarse crumbs. Stir in milk until mixture forms a soft dough. Drop by tablespoonfuls onto hot apple mixture.
BAKE 30 min. or until topping is golden brown. Serve warm.