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Make churros: In a large saucepan over medium heat, add water, butter, and sugar. Bring to a boil, then add vanilla. Turn off heat and add flour and salt. Stir with a wooden spoon until thickened, 30 seconds. Let mixture cool for 10 minutes.
To cooled mixture, using a hand mixer, beat in eggs one at a time until combined. Transfer mixture to a piping bag fitted with a large open star tip.
In a large pot over medium heat, add enough oil to come halfway up the sides and heat to 375°. Holding the piping bag a few inches above the oil, carefully pipe churros into 6" long ropes. Use kitchen scissors to cut off dough from piping bag.
Fry until golden, 4 to 5 minutes, turning as necessary. Fry 3 to 4 churros at a time and let oil come back to 375° before each batch. Remove churros with a slotted spoon or tongs and immediately roll churros in cinnamon sugar, then place on a cooling rack.
Make chocolate dipping sauce: Place chocolate chips in a medium heatproof bowl. In a small saucepan over medium heat, bring heavy cream to a simmer. Pour hot cream over chocolate chips and let sit 2 minutes. Add cinnamon and salt and whisk to combine.
Serve churros with chocolate dipping sauce.