In a mixing bowl, cream the butter, sugar and cream cheese. Add vanilla and egg yolk; mix well. Add flour and blend. Cover and refrigerate.
Roll into 1 inches balls. Place 2 inches apart on ungreased baking sheets. Using the end of a wooden spoon handle, make indentation in the center of each ball. Fill with 1/4 teaspoon jam. Bake at 350 for 10-12 minutes or until set. Remove to wire racks to cool.