PREHEAT oven to 350° F. Line twenty-four 2 1/2-inch muffin cups with paper bake cups.
MICROWAVE 1 cup of morsels in small, uncovered, microwave-safe bowl on MEDIUM-HIGH (70%) power for 1 minute; STIR. The morsels may retain some of their original shape. If necessary, microwave at additional 10- to 15-second intervals, stirring just until melted; cool.
BEAT cream cheese and granulated sugar in medium mixer bowl until combined. Beat in 1 egg. Stir in the remaining unmelted morsels.
COMBINE flour, oats, baking powder, baking soda and cinnamon in small bowl. Beat butter and brown sugar in large mixer bowl until combined. Beat in remaining egg, applesauce, and melted morsels. Gradually stir in the flour mixture until just combined. Spoon batter into prepared muffin cups, filling each about one-third full. Spoon about 1 tablespoon cream cheese mixture over batter in each cup.
BAKE for 25 minutes. Cool in pans on wire racks for 10 minutes. Remove to wire racks to cool completely. (Cupcakes may have dip in centers during cooling.)