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To prepare the cupcake batter: In a large heat resistant bowl, combine the chocolate and butter over a pot of simmering water, without letting the bottom touch the water. Stir gently until melted and well combined. You may use a microwave, if preferable.
Remove chocolate from heat and stir in the vanilla. Add the sugar. Beat with a handheld electric mixture until smooth and combined, about 3 minutes. Add the eggs, 1 at a time, mixing for 20 seconds between each egg to incorporate.
In a separate bowl, sift together the flour, cocoa powder, baking powder, and salt. Mix until well blended.
Using ladle or small measuring cup, fill the cupcake cups 2/3 of the way full. Place a peanut butter cup in the center of each cup and press down slightly. Bake until the cupcakes are firm to the touch about 20 minutes.
To prepare the frosting: Using a handheld electric beater, cream the cream cheese and butter together thoroughly. Add the chili power and cinnamon, mixing to incorporate. Add the salt, vanilla, and confectioners' sugar. Finally, mix in the melted chocolate and blend thoroughly until smooth. If additional thickening is needed, add more sifted confectioners' sugar, a little at a time, until a spreadable consistency is reached.