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In a large bowl, whisk together the flour, ¼ cup of the sugar, baking powder, and salt.
In a separate bowl, whisk together the milk, melted butter, and egg.
Pour the wet ingredients into the dry ingredients and stir just until combined (do not overmix).
In a shallow bowl, mix together the remaining ½ cup sugar and cinnamon.
In a large pot or Dutch oven, heat 2-3 inches of vegetable oil to 350°F.
Working in batches, carefully drop spoonfuls of the dough into the hot oil and fry for 1-2 minutes per side, until golden brown.
Remove the donuts from the oil and immediately toss them in the cinnamon-sugar mixture to coat.
Serve the donuts warm.