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Heat the milk in a saucepan over low heat until just warm. Remove from heat and pour into a large bowl. Add yeast and 1 tablespoon of the sugar. Use a fork to whisk until well-combined. Cover and set aside for 10 minutes or until frothy.
Add the flour, salt, egg, butter and remaining sugar to the yeast mixture. Use a stand mixer with the dough hook attachment to knead, on low speed, until combined. Increase speed and beat for 5 minutes or until the dough is smooth and elastic. Transfer dough to a lightly oiled bowl and cover with plastic wrap. Set aside in a warm, draft-free place for 45 minutes or until the dough has doubled in size.
Punch down the dough. Use a lightly floured rolling pin to roll out the dough on a lightly floured surface to a 1.5cm thick. Use a 7cm-diameter pastry cutter to cut 15 circles from the dough. Use a 3.5cm-round pastry cutter to cut the centres from each circle (see tip). Transfer doughnuts to trays lined with baking paper. Set aside for 30 minutes or until doughnuts have risen slightly.
Preheat a 7-litre air fryer to 180C for 3 minutes. Carefully place doughnuts in the basket in batches. Cook for 5 minutes or until golden and cooked through.
For cinnamon sugar doughnuts, combine the sugar and cinnamon in a shallow dish. Once doughnuts are cooked, spray with oil, then toss, one at a time, in cinnamon sugar to coat.
For vanilla glazed doughnuts, place a wire rack over a baking tray. Place icing sugar and vanilla in a medium bowl. Gradually add milk to form a thin icing. Use a fork to dip the doughnuts, one at a time, in the glaze. Turn to coat. Transfer doughnuts to the wire rack. Set aside for 15 minutes or until the glaze sets.