Combine flour, sugar, yeast and salt in a bowl. Make a well. Mix in milk, butter and egg until dough starts to come together. It may be sticky.
Knead on a well-floured surface until smooth. Place in a greased bowl. Cover. Prove for 90 minutes or until dough has doubled in size.
Punch down the dough. Knead on a lightly floured surface for 2 minutes or until smooth. Roll out dough until 1cm thick. Rest dough for 2 minutes.
Use an 8cm round cutter to cut out discs. Use a 3.5cm round cutter to cut out centres. Place on a lined tray. Set aside for 15 minutes to rise slightly.
Combine extra sugar and cinnamon on a tray. Heat oil to 180°C. Deep-fry 4-5 doughnuts for 40 seconds each side or until puffed and golden.
Transfer the donuts to the sugar mixture and turn to coat. Repeat, in 3 more batches, with remaining donuts.
Recipe and image courtesy of Besser Italian, Surry Hills.