Place ham in a Dutch oven or large kettle. Add cider, peppercorns and bay leaf. Add enough water just to cover; bring to a boil. Reduce heat; cover and simmer for 1 hour.
Drain, reserving 3 cups cooking liquid; discard peppercorns and bay leaf. Remove skin from ham if desired; score the surface with shallow cuts, making diamond shapes. Insert whole cloves in the center of each diamond. Combine applesauce, horseradish and mustard; rub over ham.
Place ham on a rack in shallow roasting pan; pour reserved liquid into pan. Bake, uncovered, at 350° for 1 hour or until a thermometer reads 140°. Remove from the oven; cover with foil and let stand for 10-15 minutes before slicing.