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In the bowl of a mixer whisk the yeast and warm milk together and let the yeast dissolve. Add ¼ cup sugar, the egg, butter, salt, and 2 ½ cups of flour. Mix on medium speed until fully combined. If the dough is too sticky, add more flour 1-2 tablespoons at a time until the dough is soft and tacky but not sticky.
Switch from the paddle attachment to the dough hook and knead on medium-low speed for 5-6 minutes, until the dough is smooth. Place in a greased bowl and cover. Set in a warm place and let rise for about 1 hour, until doubled in size.
Punch the dough down and turn it onto a lightly floured surface. Roll out to an 18x9 inch rectangle. In a small bowl mix together the remaining ¼ cup of sugar and cinnamon. Leaving ½ inch edge, sprinkle the cinnamon-sugar mixture over the dough. If the cinnamon sugar is having trouble sticking to the dough, you can very lightly mist the dough with water from a spray bottle. You can also mist the top of the cinnamon sugar to prevent large holes from forming between the layers, but be careful to not mist too much otherwise the cinnamon sugar can leak out.
Starting with the short end, roll the dough up. Make it a tight log by slightly stretching the rolled end towards you as you roll. Pinch the seam together. Place in a greased 9x5 inch pan seam side down. Cover with a kitchen towel and let rise for about 1-1 ½ hours, until doubled in size.
Preheat the oven to 350°. Once doubled in size, mix together the egg and milk for the egg wash. Brush the top of the loaf with the egg wash and then bake for 30-35 minutes, until golden brown. Remove from the pan and cool on a cooling rack.