01 - Dissolve yeast in warm water in a small bowl. Let stand until foamy, approximately 5 minutes.
02 - Combine milk, sugar, egg, and melted butter in a large bowl. Stir in the activated yeast mixture.
03 - Add flour and salt, mixing until soft dough forms. Transfer to floured surface and knead for 3-4 minutes until smooth and elastic.
04 - Place dough in lightly greased bowl, cover, and let rise in warm place for 1 hour until doubled in size.
05 - Punch down dough and turn onto floured surface. Roll to 1/4-inch thickness. Cut into 2-inch squares or rectangles.
06 - Heat oil to 350°F in deep fryer or heavy pot. Fry dough pieces in batches, turning once, until puffed and golden brown, about 1-2 minutes per side.
07 - Remove with slotted spoon and drain on paper towels. Generously dust with powdered sugar while still warm.
08 - Serve immediately for optimal flavor and texture.