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Dissolve the sugar in warm milk, blend in the yeast and leave for 15 minutes. Mix together flour, yeast and remaining ingredients to make a dough. The dough needs to be very soft, similar to pizza dough.
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Knead lightly on a floured board; shape into a ball, place in a greased bowl, cover, and let rise in a warm, draft-free place for 1 hour or until doubled in bulk.
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Punch dough down. On lightly floured board roll dough 1/4 inch thick. Cut dough into 3-inch rounds. On half of the rounds place about 1 teaspoon of jam or jelly. Brush edge with a little egg white then top with remaining rounds of dough. Press to seal edges. Cover with cloth and let rise for 30 minutes or until double in bulk.
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Preheat the oil in a deep fryer or skillet. Gently place the doughnuts into the oil, top side down, 3 to 4 at a time. Fry, turning several times, until golden all over. Sprinkle with powdered sugar.