Grate the onions and potatoes into a large hand towel or strainer over a large bowl (you could also do this through the grating blade in a food processor).
Press on the potato mixture in the strainer and discard any clear liquid, reserving the thick white starch in the bowl.
Place the onion, potatoes, reserved potato starch, egg, flour, salt and pepper in a bowl and throughly combine.
Heat enough oil to cover the bottom of a saute pan over medium heat.
Place 1-2 heaping tablespoon of potatoes in the oil forming a circle.
Cook for 2-3 minutes or until golden and flip over.
Cook another 2-3 minutes or until cooked through and remove to a paper towel lined plate to drain.
Can be served immediately or kept warm in a 300 degree oven until all latkes are prepared.
Serve with sour cream and apple sauce.