Pierce the casings of knockwurst and arrange in medium skillet. Add 1 inch of water, bring to a simmer and warm wursts through. Remove from the pan. Drain the skillet and add butter. Melt butter over medium heat. Cut each knockwurst into 1/3 and add back to the pan to crisp casings. Add sauerkraut to the pan, sprinkle in caraway, add bay leaf and peppercorns. Pour the beer into the skillet. When the beer comes to a bubble reduce heat to simmer.
Heat a second skillet over medium high. Add oil, 1 turn of the pan and add chopped bacon. When the bacon renders its fat, add onions and saute 3 to 5 minutes, then add sliced apples and saute mixture another 2 or 3 minutes. Add smoked chops to the pan and caramelize meat on both sides, 2 or 3 minutes. Remove chops to a plate and loosely cover with foil. Pour the beer into the pan and reduce heat to a simmer.
When you are ready to serve, cut several slices of pumpernickel in half down the middle. Place a bowl of spicy mustard alongside the pumpernickel bread for passing at the table.
Place 2 or 3 chunks of the knockwurst on each dinner plate on a bed of spiced sauerkraut. Serve 3 pieces of smoked pork chops topped with bacon, apples and onions. Place deli style large dill or half sour pickles, German cheeses and pretzels out for an evening of uber snacking!