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1
Make the Doughnuts: In a small saucepan, warm the milk slightly with 1 teaspoon sugar.
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2
Add the yeast and let sit for 5 minutes to proof.
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3
In a small bowl, beat the egg with the water.
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4
In a standing mixer with a paddle attachment mix the flour, remaining 1/3 cup sugar, salt, and nutmeg.
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5
Add the proofed yeast mixture, beaten egg mixture, and melted butter.
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6
Remove the paddle, switch to a dough hook, and mix until well-blended and kneaded, about 15 minutes.
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7
Transfer the dough to a large greased mixing bowl.
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8
Cover with plastic wrap and chill overnight.
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9
On a floured surface, roll the dough out to about 1/4-inch thick and transfer to a sheet pan.
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10
Cover with plastic wrap, and chill for 30 minutes, allowing the dough to rest.
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11
Cut dough into 1 1/2-inch squares.
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12
Line a sheet pan with a buttered sheet of parchment paper.
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13
Arrange the dough squares 1/2-inch apart on the sheet pan and cover with another sheet of buttered parchment.
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14
Place in a warm place to rise about 30 minutes.
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15
Make the Coating: In a small bowl, combine the sugar and cinnamon to coat doughnuts.
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16
Heat the oil in a large pot to 375 degrees F and fry the doughnuts for 1 to 2 minutes on each side.
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17
While doughnuts are still warm, toss them in the cinnamon sugar, to coat.
