Place butter into a microwave-safe cup and heat on high in microwave until melted, about 20 seconds.
Combine sugar, flour, milk powder, baking powder, cinnamon, and salt in a small bowl; add water and stir. Transfer sugar mixture to the mug and stir with a fork until batter is well mixed. Add peaches to top of batter.
Heat in the microwave on 70 percent power for 2 minutes. Let mug stand in the microwave for 1 minute more. Cool slightly.
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