Add the olive oil and butter to a large saute pan over medium heat. Add the onions and saute until caramelized, about 20 to 25 minutes. Season with salt and pepper, to taste. Remove from the heat and allow the onions to cool.
Blend the sour cream, mayonnaise, hot sauce, garlic powder, and chives together in a medium bowl. Add the onions and stir well to blend. Taste for seasonings. Refrigerate until ready to serve.
*Cook's Note: This dip is best made the night before, so the flavors have time to meld.
Preheat oil in a deep-fryer or Dutch oven to 350 degrees F.
Mix all ingredients in a large bowl. Drop heaping tablespoon-sized amounts of the mixture into the hot oil. Fry in batches for 2 to 3 minutes each. Remove from the oil to paper towels to drain and season immediately with salt and pepper Transfer to a serving platter or bowl and serve with the onion dip.