Pour milk into small saucepan and whisk in powdered milk and honey. Place over medium heat and bring to 120 degrees F on an instant read thermometer. Once milk has reached 120 degrees F, pour into a cylindrical plastic container, reserving 1/2 cup. Whisk in the reserved 1/2 cup into the yogurt and add back to the milk mixture.
Place container into a narrow wine bucket, lined with a heating pad. Set the heating pad to medium. Let the mixture ferment for 3 to 12 hours making sure the temperature stays as close to 115 degrees F as possible.
After fermentation is complete place into the refrigerator overnight.
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