Put the vinegar, oil, onions and some salt and pepper in a medium skillet over medium heat. Cook, stirring frequently, until the onions are very soft and soupy, about 15 minutes.
Stir in the chile powder and cinnamon and cook for 1 minute. Add the ketchup, 1/2 cup water, the hot sauce, 1/2 teaspoon salt and 1/4 teaspoon black pepper and bring to a simmer. Simmer, stirring occasionally, until thickened, about 10 minutes. Transfer to a bowl and cool to room temperature before serving.