In a medium bowl, combine the yeast with 1/4 cup lukewarm water and 1 tablespoon of sugar. Mix until the yeast dissolves then set aside for 5 minutes. Stir in the milk, vanilla, eggs, and butter and reserve.
In a large bowl, mix the flour with 11/3 cup sugar, salt, and nutmeg. Make a well in the center of the dry ingredients. Pour the yeast and milk mixture into the well. Mix the wet ingredients into the dry, forming a soft, smooth dough. Cover the dough with a clean towel and set aside to rise in a warm place until dough doubles in size, about 1 hour.
Punch the dough down, then with oiled fingers, pinch off pieces about the size golf balls. Place the dough balls on greased baking sheets. Cover the malasadas with a clean towel and set aside to rise in a warm place for about 15 minutes.
In a heavy, high-sided pot, heat a bout 2 inches of oil over medium-high until the oil reaches 325 degrees F. Working in small batches, fry the malasadas until they are uniformly golden brown, 7 to 10 minutes per batch. Drain the malasadas on a plate lined with paper towels just until they are cool enough to handle then roll them in cinnamon sugar and serve.
This recipe was provided by a chef, restaurant or culinary professional. It has not been tested for home use.
Recipe courtesy of Chef Leonard Rego, Leonard's Bakery - Hawaii