Place 1/4 cup of the warm milk in the bowl of a bread maker. Sprinkle the yeast over the milk. Let set for 5 minutes.

In a small bowl, combine the remaining milk, sugar and butter. Add to the yeast mixture.

Stir gently to combine slightly.

Add egg and stir until incorporated.

Add the flour, nutmeg, and salt.

Set the bread machine on the dough setting and let it do its thing.

Transfer the dough to a floured surface. Roll the dough out into 1/2 inch thickness.

Using a donut cutter (or two different-sized circle cookie cutters), cut out donuts until there isn't any dough left.

Place the donuts on a cookie sheet sprayed with cooking spray, about 2 inches apart.

Cover with a clean towel and allow to sit for 45 minutes.

Preheat oven to 375 degrees.

Place the cookie sheet in the oven and bake for 7 minutes until lightly golden brown. Do not overbake.

Remove the donuts and allow to cool for 5 minutes.

Place melted butter in shallow bowl. Mix sugar and cinnamon together.

Dip the donuts halfway into the butter, then immediately into the sugar and cinnamon mixture.

Allow to set an additional 5 minutes and enjoy!