Blend butter, sour cream, eggs, yolk, and canola oil in medium bowl.
In large bowl, whisk together salt and 3 1/2 cups flour.
Add liquid mixture to flour mixture and mix thoroughly.
Slowly add another cup of flour 1/4 cup at a time, mixing each time until well blended. If needed, pour mixture out onto flat surface covered with remaining flour and knead together until flour is incorporated. (Do not mix in the 1 1/2 cups flour needed for final preparation).
Cover dough with a towel and set aside.
Place potatoes in large sauce pan and add enough cold water to cover potatoes plus about one inch. Add tablespoon salt.
Bring water to a boil, reduce heat slightly, then continue to boil potatoes for 15 minutes.
Saute onion in butter until transparent. Set aside until potatoes are finished.
Drain potatoes and return to sauce pan.
Add cheese, Velveeta, and onion mixture to drained potatoes.
Mash potatoes with a masher until all ingredients are well blended. If needed, you can add a little milk, but potato mixture should be very firm.
Add bacon and chives to potato mixture. Blend well.
Roll dough out onto floured surface, rubbing dough with flour as necessary to prevent sticking. You may have to turn dough over and sprinkle additional flour on it to make sure it doesn't stick.
Roll dough out to about 1/8 inch thick.
Using large biscuit cutter (about 2 1/2-3 inches in diameter), cut dough into individual rounds.
Using rolling pin, roll each round a little thinner to about 3 1/2 inches in diameter.
Place round in palm of hand, then spray exposed side lightly with water. Make sure you get the edges especially. This is done to help seal the dough, so edges should be slightly wet, but not soaked.
Place about 1 tablespoon of filling into center of dough, then fold dough in half over filling and pinch ends to seal. (You may prepare potato filling ahead of time by rolling one to two tablespoons at a time into balls and rolling lightly in flour.)
Lay pierogies out on baking sheets covered with parchment paper.
Place baking sheets with pierogies in freezer for at least one hour or until frozen.
Transfer frozen pierogies to large freezer bags.
When ready to serve (may keep pierogies frozen for several weeks), remove pierogies from freezer.
Place frozen pierogies, 3-4 at a time, in boiling water for 3-4 minutes or until pierogi rises to the top.
Remove pierogies with a slotted spoon and let drain on paper towel.
In large frying pan, melt about 1/4 cup butter (or you can use bacon drippings).
Using medium heat, fry pierogies on each side until slightly browned (about 2-3 minutes on each side).
Remove pierogies and serve with sour cream and salsa.