Activate the Yeast: In a small bowl, mix warm milk, yeast, and a teaspoon of sugar. Let sit for 5–10 minutes until foamy. If it doesn’t foam, start over with fresh yeast.
Make the Dough: In a large bowl, whisk flour, sugar, and salt. Add melted butter, egg, vanilla extract, and the yeast mixture. Stir until a dough forms.
Knead and Rise: Knead the dough on a floured surface for 8–10 minutes until smooth. Place in a greased bowl, cover, and let rise for 1 hour until doubled in size.
Shape the Donuts: Roll the dough to ½-inch thickness and cut out heart shapes. Place on a parchment-lined baking sheet, cover, and let rise for another 30 minutes.
Fry the Donuts: Heat 2 inches of oil to 350°F (175°C). Fry donuts in batches for 1–2 minutes per side until golden brown. Drain on paper towels.
Coat: While warm, roll the donuts in sugar.