Step 1

Stir together warm water, yeast, and 1/2 teaspoon sugar; let stand until foamy, about 5 minutes.

Step 2

Stir together flour, 1/4 cup sugar, and 1/4 teaspoon salt in a medium bowl. Add yeast mixture, milk, oil, and egg; stir until a soft dough comes together. Turn dough out onto a lightly floured surface and knead until smooth, 1 to 2 minutes (dough will be sticky). Pat dough into an 8-inch square.

Step 3

Toss together apple and cinnamon in a small bowl, and sprinkle over 1/2 of the dough. Fold the side with no apples over the apples and knead until apples are dispersed, about 30 seconds. Transfer dough to a lightly greased bowl, cover, and let rise in a warm place until doubled in volume, about 1 hour.

Step 4

Lightly flour a piece of parchment paper; set aside. Turn dough out onto a lightly floured surface. Cut into 8 pieces. Pat each portion of dough with floured hands into a 3- to 4-inch oval; fritters do not have to be uniformly shaped. Transfer fritters to the prepared parchment paper, cover loosely with plastic wrap, and let stand until doubled in volume, about 30 minutes.

Step 5

Preheat the air fryer to 360 degrees F (180 degrees C). Preheat the oven to 200 degrees F (95 degrees C). Place a wire rack over a rimmed baking sheet.

Step 6

Place 2 to 3 fritters in a single layer in the preheated air fryer basket and cook until golden brown, about 5 minutes. Remove cooked fritters to the prepared baking sheet and keep warm in the preheated oven. Repeat with remaining fritters.

Step 7

Whisk together caramel sauce and 1 tablespoon hot water, adding more water if necessary, to make a smooth drizzling consistency. Drizzle hot fritters with caramel sauce and sprinkle with sea salt, allowing baking sheet to catch caramel drips and excess salt.