In a medium bowl, cream together butter and cream cheese until smooth and well blended. Add flour and beat until smooth.
Shape dough into a round ball and wrap in aluminum foil or plastic wrap and refrigerate overnight.
Remove dough from refrigerator 30 minutes prior to using.
Preheat oven to 375°.
On a flat, lightly floured surface, roll chilled dough very thin. Cut dough into rounds using a 3" or 4" round cookie cutter. Place a small spoonful of fruit preserves in the center of each round and moisten the edges with water. Fold round over in half and press the edges together.
Place empanadas on an ungreased baking sheet and bake in oven for 15-20 minutes.
Place sugar and cinnamon in a shallow dish and mix together. Remove cookies from oven and immediately roll in sugar/cinnamon mixture.