Heat 2 Tbs. of the oil in a 10-inch skillet over medium-high heat. Add the onion and 3/4 tsp. salt, reduce the heat to medium, and cook, stirring, until starting to soften, 2 to 3 minutes. Sprinkle with the sugar and cook, stirring, until completely softened and golden-brown, 10 to 13 minutes more. Remove the pan from the heat, add the sherry, and carefully return the pan to the stove. Raise the heat to medium high and cook, stirring, until the sherry has almost evaporated, about 1 minute. Transfer the onions to a cutting board, let cool for a couple of minutes, and then chop.
In a blender, purée about 1/4 cup of the onions with the vinegar and mustard. With the motor running, slowly drizzle in the remaining 1/2 cup olive oil; the mixture will thicken. Transfer to a medium bowl. Stir in the remaining onions, sundried tomatoes, thyme, and salt and pepper to taste.
nutrition information (per serving):
Photo: Scott Phillips