Divide flour in 2 parts. Work butter into one part and the egg yolks and water into the other half of the flour. Join batters together and roll out on board. Fold from all four sides and roll out again. Dough is folded and rolled out a number of times until it no longer sticks to the rolling pin or board.
Form a roll,wrap in plastic wrap and refrigerate overnight. Next day, roll out and cut into small squares. Place filling in center and pinch 4 corners together in center. Bake at 400 until light in color-about 15 minutes. When cool,sift powdered sugar on top of kolacky.