In a large bowl, pour the warm milk sprinkle the yeast and ½ tsp of the sugar on top of the milk.
Give it a light stir with a spoon and allow it to sit for 5 minutes.
The mixture should be frothy after 5 minutes, if not, start over with new yeast.
Using a hand mixer running on low speed, add the remaining sugar, eggs, butter, vanilla essence, 2 cups flour, salt, and nutmeg.
Beat on low speed for 1 minute or until combined.
Add the remaining flour and beat on medium-high speed until the dough begins to pull away from the sides of the bowl.
The dough should be thick, yet soft. And slightly sticky.
If it is too wet, add 2 to 3 more tbsp of flour. Make sure you do not add too much.
Form dough into a ball and turn it out onto a lightly floured surface.
Knead for 2 minutes, then place into a greased bowl, use nonstick spray or oil.
Turn the dough over to coat all sides. Cover the bowl with plastic wrap and place it in a warm environment to rise until doubled for about 1 and ½ hours.
Once doubled in size, punch down the dough to release any air bubbles.
Remove dough from the bowl and turn it out onto a lightly floured surface.
Punch down again to release any more air bubbles if needed, roll the dough out until it is only 1,2 cm (½ inch) thick.
Using a doughnut cutter, cut into 12 doughnuts. If you can't quite fit 12, re-roll the scraps and cut more.
Line 2 baking sheets with baking paper. Place 6 doughnut and doughnut holes on each.
Cover with kitchen towels and allow to rest for about 15 to 20 minutes as you prepare the oil.
Place a cooling rack over a third baking sheet.
Pour oil into the pot set over medium heat. Heat to 190ºC (370ºF).
Add 2 to 3 doughnuts at a time and cook for 1 minute on each side. Carefully remove with a metal spatula or metal slotted spoon.
Place onto a prepared wire rack. Repeat with remaining doughnuts, then turn off the heat.