It can be done either way, Magga.
When I was growing up, if we ran out of apple butter before winter was over, we always had dried apples. We soaked them long enough to rehydrate them (water or apple juice or cider) then cooked them for hours and hours (stirring often) till they were mushy tender and till all the liquid was evaporated, so that only a thick paste was left.
Earlier years, everybody brought their apples to one house and in an huge old iron pot outside on an open fire, they cooked those apples down. Everybody took turns stirring with a sort of wooden paddle, I remember, looked a little like an oar.
There are lots of recipes out there now, but there are none as good as what my grandmother and great aunt made outside in that iron kettle. That apple butter was flavored with just a hint of hickory smoke and a whole lot of family fun. The spices are pretty much the same, but there's nothing like that outside flavor!
