Nebraska City Meatballs

Meatballs:
3 pounds hamburger
1 can evaporated milk
2 cups oats
½ cup chopped onion
2 large eggs
2 tsp chili powder
1 tsp liquid smoke
Salt and pepper


Sauce:
1 ½ cup brown sugar
2 cups catsup
½ cup chopped onion
2 tsp liquid smoke
1 tsp garlic
2 tsp chili powder