Heat the oil over medium heat; cook and stir the onions for 15 minutes or until tender. Reduce the heat to low. Stir in the garlic, sugar and salt; continue cooking for 10 to 15 minutes longer or until the onions are turn a deep golden brown color. Remove from the heat and cool slightly.
Place the cottage cheese, sour cream, Worcestershire sauce and cayenne pepper in the bowl of a food processor. Blend until almost smooth. Add the onion mixture; pulse several times until the onions are chopped and distributed.
Transfer the mixture to a serving bowl; cover and refrigerate for at least 30 minutes.
Just before serving, sprinkle with chopped chives. Serve with fresh vegetables or whole grain crackers.