Preheat oven to 350°F (175°C). Line an 8-inch baking pan with parchment paper. Grease the paper and any exposed pan. Alternatively, skip the lining and grease the pan.
Whisk together the flour, baking powder, and salt. Set aside.
Using an electric mixer on medium speed, beat the butter and brown sugar until light and fluffy. Add the eggs, one at a time, mixing well after each addition. Mix in the vanilla.
Reduce the mixer speed to low. Add the flour mixture in three portions, alternating with two portions of the sour cream. Mix just until combined or a few streaks of flour remain.
Stir in the nuts and butterscotch chips.
Transfer the batter to the prepared pan, and spread evenly.
Bake 30-35 minutes, or until a pick inserted into the center comes out clean.
Cool in the pan on a wire rack for 15 minutes. Then use the overhanging parchment to a wire rack to cool completely.
To make the frosting:
Using an electric mixer on medium speed, beat the dulce de leche, cream cheese, and vanilla until thoroughly combined and smooth.
Spread the frosting on the cooled cake. Sprinkle the reserved pecans on top of the cake.
Notes
Store tightly covered in the refrigerator up to 3 days.