In a large saucepan, combine the apples, sugar, cranberries, tapioca, cinnamon and water. Let stand for 5 minutes, stirring occasionally. Cook and stir over medium heat until mixture comes to a full boil. Cook and stir 3 minutes longer. Pour into a greased 2-qt. baking dish. Dot with butter.
In a bowl, combine the flour, sugar, baking powder and salt. Cut in butter until crumbly. Stir in milk to form a soft dough. Drop dough by tablespoonfuls over hot apple mixture. Bake, uncovered, at 375 degrees F for 30-35 minutes or until topping is golden brown and a toothpick inserted into topping comes out clean.