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Lightly combine beef, bread crumbs, water, onion, egg, 1 1/2 tsp. of the salt and the pepper. Shape into 24 meatballs. Place meatballs in a shallow baking dish and bake at 400o for 15 minutes or until browned.
Meanwhile, melt margarine in medium-size saucepan. Add flour, cook until bubbly. Reduce heat. Gradually add milk, stirring constantly until sauce is thickened and smooth. Stir in dill and remaining 1/2 tsp. salt. Spoon over hot meatballs and serve with buttered noodles.
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