Activate the Yeast: In a small bowl, combine the warm milk, sugar, and yeast. Let it sit for about 5-10 minutes until it becomes frothy.
Mix Dry Ingredients: In a large mixing bowl, whisk together the flour, salt, and nutmeg.
Combine Wet Ingredients: In another bowl, mix the melted butter, eggs, and vanilla extract.
Make the Dough: Pour the yeast mixture into the dry ingredients, followed by the wet mixture. Stir until the dough begins to come together, then knead on a floured surface for about 5-7 minutes until smooth and elastic.
Let it Rise: Place the dough in a lightly greased bowl, cover it with a clean towel, and let it rise in a warm place for 1-1.5 hours or until doubled in size.
Shape the Doughnuts: Punch the dough down and roll it out to about ½ inch thick. Use a round cutter to cut out the doughnut shapes, and use a smaller cutter to create the hole in the middle.
Fry the Doughnuts: Heat vegetable oil in a large pot or deep fryer to 350°F (175°C). Fry the doughnuts in batches, cooking each side for about 1-2 minutes or until golden brown. Use a slotted spoon to transfer them to paper towels to drain.
Glaze or Coat: Once the doughnuts have cooled slightly, dip them into your favorite glaze or sprinkle them with powdered sugar or cinnamon sugar.
Serving and Storage Tips:

Homemade Doughnuts
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