MELT butter in small skillet on medium high heat. Add onion; cook and stir until tender. Add garlic; cook and stir 30 seconds.
ADD onion mixture to combined meat, rice, egg and seasonings in large bowl. Add 1/4 cup water; mix until well blended. Shape into 30 meatballs.
MIX spaghetti sauce and 1/2 cup water in skillet. Bring to boil; add meatballs. Return to boil. Reduce heat to low; cover. Simmer 15 minutes or until meatballs are cooked through.