Reserve 1 tbsp butter and melt remaining butter in pot over low heat. Add onions. Cover and cook, stirring occasionally, for 45 minutes. Separately, in a small saucepan, boil ⅓ of the wine until it is reduced to 1 tbsp. Add another ⅓ and reduce again to 1 tbsp. Add remaining wine and reduce to ⅓ cup. Set aside.
Uncover the onions, increase to medium-high, and cook about 5 minutes more, stirring often. Onions should be glazed and golden brown. Sprinkle sugar over onions and continue 2-3 minutes more, stirring, until reduced to a glaze.
Reduce heat to as low as possible. Mix in wine reduction, Cover and cook, stirring occasionally, for 2 hours. The onions will be very soft and a deep purple by this time.
Raise heat to medium-high and toss in 1 tbsp butter. Continue to reduce the mixture until all the liquid has evaporated and the onions begin to fry in the released fat.
Watching carefully, turn the onions over-and-over (avoid scorching) for 10 minutes. Remove from heat, mix in vinegar. Season with salt and pepper, and serve warm or at room temperature.