Coat a 8x8 baking dish with cooking spray. Place in refrigerator.
Combine 1 cup sugar, applesauce, JELLO, unflavored gelatin and lemon juice in a medium saucepan. Let stand for 1 minute.
Bring to a boil over medium heat stirring constantly.
Boil for 1 minute and then immediately pour into cold baking dish.
Refrigerate until firm {about three hours should do it. I left mine in overnight.}
Generously dust a cutting board with sugar.
Loosen the sides of the gelatin with a spatula and invert onto cutting board.
Use small, sharp cookie cutters to cut out gumdrops.
Sprinkle sugar over a piece of waxed paper and place gumdrops on top of sugar. Let dry for about 8 hours or until slightly sticky.
Roll in remaining sugar and store in an airtight container.