Heat vegetable oil to 350 degrees.: As the oil comes up to temperature you'll notice a faint shimmer across the surface and a neutral aroma, signals the oil is ready for frying. Getting the oil to a steady 350 degrees ensures the puppies brown quickly on the outside while cooking through on the inside. If the oil is too cool the puppies absorb excess oil and become greasy, if too hot they will burn on the outside before the interior cooks. Use a thermometer and adjust the burner to maintain the temperature, watching that bubbles form gently when a small batter drop is added and it rises steadily.
Place the strawberry preserves in a fine wire sieve. Run water over the preserves until only the fruit is left. Mince the strawberries into small pieces.: You'll notice the syrup draining away, leaving concentrated fruit that has vivid color and texture. Drying the preserves this way intensifies the fruit without adding extra liquid to the batter, which keeps the batter from becoming too thin. Mince the retained fruit until pieces are small and uniform so they distribute evenly in the batter. A common mistake is leaving large chunks that will create uneven pockets and cause splattering in the oil, so aim for small, tender bits.
In a medium-sized bowl combine pancake mix, water, strawberry preserves, and white chocolate chips. Stir just until blended.: As you stir the batter it should become cohesive and slightly thick, with flecks of strawberry and white chips visible throughout. You're aiming for a consistency that will hold its shape when scooped but still flow enough to form a round pup. Overmixing develops gluten and risks a tough interior, so stop as soon as the dry streaks disappear. If the batter seems too heavy add a splash of water, but be conservative to preserve structure.
Use a 1-ounce cookie scoop to drop portions of batter into the oil. Cook until browned on the bottom, then flip over and cook for another 30 seconds.: When the puppies hit the oil they should sizzle softly and begin to brown at the base within 30 to 45 seconds. Watch for a warm golden color forming on the bottom edge before you flip, that visual cue means the exterior has set. After flipping the short additional cook finishes the interior. Flip carefully to avoid splashes, and avoid crowding the pan so the oil temperature recovers between batches. A common pitfall is overcrowding which drops oil temperature and yields limp puppies.
Remove from oil, and drain. Sprinkle with powdered sugar if desired. Serve with cream cheese frosting.: When you lift them out they should be golden and give a light crackle when tapped. Drain briefly on paper towels to remove excess oil, then dust with powdered sugar for a charming finish. Serve warm so the interior remains tender and the frosting can melt slightly at contact. If they sit too long they will cool and lose some charm, so plan to serve straight from the fryer.
Combine butter, cream cheese, vanilla and powdered sugar in a small bowl. Mix ingredients with a mixer until the frosting is smooth.: As you beat the frosting it becomes glossy and fluffy, with a creamy aroma from the butter and cream cheese . Smooth texture ensures it will cling to puppies without being runny. If the frosting feels too soft chill briefly, if too stiff add a teaspoon of water and beat until spreadable. Avoid overbeating which can aerate it too much and make it grainy; stop when it is smooth and spreadable.