Step 1

Place milk, water, butter, egg, sugar, salt, flour and yeast into bread machine pan in exact order listed. Do not stir!

Step 2

Insert baking pan securely into baking unit, close lid, select dough setting and push start.

Step 3

When cycle is complete, remove dough from pan and transfer to lightly floured surface.

Step 4

Using rolling pin lightly dusted with flour, roll dough to ½ inch thickness.

Step 5

Cut with floured dusted donut cutter or circle cookie cutter.

Step 6

Transfer donuts to baking sheet that has been covered with wax paper. Place another layer of wax paper on top, then cover with clean tea towel. Let rise 30-40 minutes until slightly raised.

Step 7

While donuts are rising heat vegetable oil to 375º (190ºCº) in deep fryer or large heavy pot.

Step 8

Fry donuts 2-3 at a time until golden brown on both sides. About 3 minutes.

Step 9

Drain on paper towel.

Step 10

Sprinkle with granulated or confectioners sugar