Place blueberries, water and granulated sugar in a sauce pan. Over medium low heat, simmer the berries until it forms a thick sauce, about 20 minutes. Stirring regularly. Let cool.
Cheesecake Bites:
Place cream cheese, powdered sugar and vanilla in a small bowl. Mash until combined thoroughly. Place mixture into a piping bag or a small plastic baggie with one corner snipped.
Fill phyllo cups evenly with cream cheese mixture. Place dollops of blueberry sauce on top. Garnish with powdered sugar, serve and enjoy!