Heat milk to 90 - 110ºF. Transfer to a large glass measuring cup, stir in instant yeast and ½ tsp. granulated sugar. Let mixture rest for 5 minutes, until slightly bubbly.
Whisk egg, vanilla extract, and 1 tbsp. vegetable oil into milk mixture until well combined.
In a large mixing bowl, stir together flour, 2 tbsp. granulated sugar, and salt.
Pour milk mixture into bowl of dry ingredients. Stir with rubber spatula until a very sticky dough forms.
Cover bowl with plastic wrap and let it rise in a warm place for about one hour, or until doubled in size.
Gather two large-rimmed baking sheets. Line one with parchment paper, then generously dust the parchment paper with flour. Set aside. Line second baking sheet with paper towels. Set aside.
Pour vegetable oil into a deep Dutch oven or pot until about 2” deep. Heat over medium-high heat to 350º. (While oil heats, prepare the doughnuts).
Generously flour a clean work surface. Transfer dough onto surface and generously dust top of dough with more flour.
Gently pat dough into a ½” thick oval, adding more flour as needed to prevent sticking. Cut out as many 3” circles as you can using a biscuit cutter or pint glass. Gather and gently knead remaining dough scraps, flatten them into another ½” oval, and cut out more circles. Repeat until you have eight. Transfer circles to parchment-lined baking sheet.
Once oil reaches 350ºF, fry doughnuts 3-4 at a time for about 1 ½ minutes per side (3 minutes total, flipping halfway through) until browned on both sides.
Transfer fried doughnuts to baking sheet lined with paper towels and immediately sprinkle each doughnut with about ¼ tsp. cinnamon sugar per side while still warm.
Repeat until all doughnuts are fried.
Once doughnuts are cool enough to handle, gently slide a small knife into side of each one, creating a hole and gently hollowing out some of the middle of the doughnut. Pipe in jelly or Prairie Farms Light Whipped Cream, then dust with powdered sugar.
Enjoy fresh and warm!