In a large bowl pour the milk, yeast, sugar, salt, egg, water and melted butter. Stir together until well mixed.

Add flour and stir together till it forms a dough. Knead at least for 20 to 30.

Cover the dough until doubles in size. It should stay for 45 minutes to 1 hour in a warm place.

Take it out and roll it with rolling pin. Cut out the shapes with a doughnut cutter and set it aside to double in size for 20 minutes.

Fry in a medium heated oil.

Coat it with sugar after frying.

The coated doughnuts is ready.