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Step 1
Heat the oven and fit one baking sheet with paper towels and another with a cooling rack. Arrange a rack in the middle of the oven and heat to 200°F. Line 1 rimmed baking sheet with a double layer of paper towels. Fit a wire cooling rack into another baking sheet. Set both aside.
Step 2
Prepare the potatoes. Scrub the potatoes well, but do not peel. Cut each potato in half crosswise.
Step 3
Grate potatoes and onion with a food processor. Grate the potatoes and onion using the shredding disk of a food processor.
Step 4
Make a cheesecloth tourniquet and squeeze liquid from potato and onion. Transfer the grated potato and onion onto a large triple layer of cheesecloth. Gather the corners and tie around the handle of a wooden spoon. Dangle the bundle over a large bowl, then twist and squeeze the potatoes and onion as hard as you can until no more liquid comes out of the potatoes and onion shreds.
Step 5
Pour off the liquid, but keep the potato starch. Give the liquid a few minutes to allow the potato starch to settle and then pour off and discard the liquid but leave the potato starch.
Step 6
Toss the latke ingredients together with your fingers. Add the potatoes, onion, eggs, matzo meal or breadcrumbs, salt, and pepper to the bowl of starch. Mix with your fingers, making sure that the potato starch breaks up and is evenly distributed with the rest of the ingredients. Set batter aside for 10 minutes.
Step 7
Heat the oil. Place the oil or schmaltz (or a combination of the two) in a large skillet so that when melted there is a depth of 1/4 inch (for a 10-inch skillet you'll need 1 cup of melted oil/schmaltz). Heat over medium-high heat until a piece of the latke mixture sizzles immediately.
Step 8
Form latkes one at a time. Scoop 1/4 cup of the mixture onto a fish or flat spatula. Flatten with your fingers to a 4-inch patty.
Step 9
Fry the latkes until golden on both sides. Slide the latke into the hot oil, using a fork to nudge the latke into the pan. Repeat until the pan is full but the latkes aren't crowded. Cook until deeply golden-brown, 4 to 5 minutes per side, adjusting the heat if necessary.
Step 10
Drain the latkes. Transfer the latkes to a paper towel-lined baking sheet to drain for 2 minutes.
Step 11
Serve with applesauce and sour cream or keep warm in the oven. Serve immediately with applesauce and sour cream, or transfer the latkes to the wire cooling rack set in the baking sheet and keep warm in the oven for up to 30 minutes while you continue cooking the rest of the latkes.