The molecular dynamics of solutions of di-propylene glycol methylether (2PGME) and H2O (or D2O) confined in 28 Å pores of MCM-41 have been studied by quasielastic neutron scattering and differential scanning calorimetry over the concentration range 0-90 wt.% water. This system is of particular interest due to its pronounced non-monotonic concentration dependent dynamics of 2PGME in the corresponding bulk system, showing the important role of hydrogen bonding for the dynamics. In this study we have elucidated how this non-monotonic concentration dependence is affected by the confined geometry. The results show that this behaviour is maintained in the confinement, but the slowest diffusive dynamics of 2PGME is now observed at a considerably higher water concentration; at 75 wt.% water in MCM-41 compared to 30 wt.% water in the corresponding bulk system. This difference can be explained by an improper mixing of the two confined liquids. The results suggest that water up to a concentration of about 20 wt.% is used to hydrate the hydrophilic hydroxyl surface groups of the silica pores, and that it is only at higher water contents the water becomes partly mixed with 2PGME. Hence, due to this partial micro-phase separation of the two liquids larger, and thereby slower relaxing, structural entities of hydrogen bonded water and 2PGME molecules can only be formed at higher water contents than in the bulk system. However, the Q-dependence is unchanged with confinement, showing that the nature of the molecular motions is preserved. Thus, there is no indication of localization of the dynamics at length scales of less than 20 Å. The dynamics of both water and 2PGME is strongly dominated by translational diffusion at a temperature of 280 K.