In bowl, mix applesauce, raisins, lemon zest and cinnamon; cover and keep chilled. In another bowl, mix sour cream, horseradish, lemon juice and chives; cover and keep chilled.
Shred potatoes and onion on coarse side of box grater or grater blade of food processor. Place shredded potatoes and onions together in colander to drain; squeezing out excess moisture with hands. Discard liquid. Transfer shredded mixture to large bowl. Mix in eggs. Toss with flour, baking powder, salt and pepper.
Cover bottom of large skillet generously with some of the oil; set over medium-high heat. Scoop ¼-cup (60-mL) portions of latke batter into skillet; flattening each mound with back of spoon to form 4-in. (10-cm) rounds. Cook, in batches, 3 min. per side until golden brown and crisp around edges. Add more oil, as required. Make 16 latkes. Drain latkes on paper towel-lined baking sheet. Serve latkes with reserved applesauce and horseradish sauce.