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1
Mix the yeast into the room-temperature milk. Set aside while you assemble the rest of the ingredients.
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2
Place all of the dry ingredients into the bowl of a stand mixer fitted with the dough hook. Mix briefly to combine.
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3
Cut the cold butter into 1/2-inch cubes, and add them to the dry ingredients. Work the mixture on a low speed for about 2 minutes, or until the butter is mostly incorporated into the flour, with some larger flakes of butter still visible. Mix more than you would for traditional biscuits or a pie dough: Most of the butter should be incorporated into the flour.
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4
Add the milk and yeast to the mixer, and mix on a medium speed, just until the mixture starts to cohere and there is no dry flour in the bottom of the bowl.
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5
Dump the mixture out onto a floured surface, and pat and knead it together until it forms a smooth ball. Roll the dough out to about 1/2-inch thickness, and use a doughnut cutter (or a biscuit cutter and a piping nozzle) to cut out as many donuts as you can. With a 3-inch cutter, you should end up with 10 biscuits, re-rolling the dough scraps twice.
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6
Set aside your donuts and donut holes in a cool place for 30 minutes. Unlike traditional yeast baking, you do not want to put this in a warm spot -- that would cause the butter in the biscuits to melt and would make these very tough to work with.
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7
When the donuts have had their 30 minute rest, heat about 2 inches of oil in a wide, deep pan, and bring it up to 350u00b0 F (170u00b0 C). Alternatively, you can place one of the donut holes into the cold oil. When it turns golden brown, the oil is hot enough to fry in.
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8
Place a few donuts at a time into the hot oil (fewer is best -- you don't want the oil to bubble over). They need about 1 1/2 minutes per side. When they have turned a dark golden brown and have puffed up to about twice their size, the donuts are ready. Carefully remove the donuts from the oil, and place them on a cooling rack or some paper towel to drain.
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9
Once they're all cooked, you can either toss the donuts in cinnamon sugar or powdered sugar, or glaze them. I used a mixture of pureed blackberries and icing sugar to top mine.