Combine Kool-Aid powder and sugar in a large bowl.
Pour in warm/hot water and stir until sugar completely dissolves.
Let it cool to room temperature for 5-10 minutes.
Place paper cups on a flat tray for stability.
Pour the Kool-Aid mixture into cups, filling them about three-quarters full.
Cover each cup with foil/plastic wrap, and insert a popsicle stick through it into the liquid.
Freeze for at least 4 hours until solid.
Remove foil/wrap and gently tear away the paper cup to reveal your Lilly Dilly Freeze Cup. Serve immediately or store in an airtight container in the freezer for later enjoyment.