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Preheat oven to 350°F. For the Cocktail Meatballs, beat egg and milk in large bowl. Stir in bread crumbs, minced onions, seasoned salt, garlic powder and pepper. Add ground beef; mix well.
Shape into 1-inch meatballs. Arrange meatballs in 15x10x1-inch baking pan.
Bake 15 to 20 minutes or until cooked through. Drain well.
Meanwhile for the Creamy Horseradish Mustard Sauce, mix gravy mix and water in 2-quart saucepan with wire whisk until smooth. Cook as directed on package. Stir in sour cream, horseradish and seasonings until smooth. Serve with meatballs.