Melt butter in a pan.
Saute the onion on the butter until it gets a glassy / translucent look. The onion can be caramelized on low heat if desired but that takes a bit longer and more butter.
Halve the squash then slice it up either horizontally or vertically.
Add the sliced up squash and saute for 3 to 5 minutes.
Sprinkle in the salt, dill, vinegar and the optional paprika.
Pour in the water and the milk.
Turn the heat up until it reaches the boiling temperature then lower the heat and simmer the squash to desired texture in about 10 minutes.
Mix in the sour cream, bring it to boil and turn off the heat.
Let it cool off a bit before serving.