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In a small bowl, combine lukewarm milk, sugar, and dry yeast. Let it sit for about 10 minutes until frothy and activated.
In a large mixing bowl, whisk together the egg, vanilla sugar, and salt.
Add the yeast mixture to the egg mixture and stir gently.
Gradually add the flour while mixing, then add softened butter and knead the dough until smooth and elastic, about 8-10 minutes.
Cover the dough with a clean cloth and let it rise in a warm place until doubled in size, approximately 1 hour.
Roll the dough out on a floured surface to about 1 cm thickness. Use a doughnut cutter or two round cutters to shape doughnuts and holes.
Place the cut doughnuts on a floured tray and let them rise for another 30 minutes.
Heat oil in a deep fryer or heavy pot to 175°C (350°F). Fry the doughnuts in batches, turning once, until golden brown on both sides, about 2-3 minutes per side.
Drain on paper towels and dust generously with icing sugar while still warm.
Serving and storage tips:
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