Microwave milk until warm, about 1-2 min. Pour into the bowl of a stand mixer fitted with dough hook. Sprinkle the yeast on top of the warm milk and let stand until foamy, about 10 min.

Spray a medium bowl with oil. Line 2 large baking sheets with parchment. Lightly spray parchment with oil.

Add the sugar, butter, egg, vanilla and salt to yeast mixture and beat on medium until combined. Gradually add flour, increasing speed to medium-high, until dough forms a ball and pulls away cleanly from the sides and bottom of the bowl, about 7 min.

Transfer dough into an oiled bowl. Lightly oil top of dough and cover with a damp tea towel. Let rise in a warm place until doubled in size, about an hour.

Roll out dough on a floured surface until 1/2 in. thick. Cut into 28 rounds using a 2-in. round cookie cutter. Then use a 1-in. round cutter to cut out holes from centre of rounds. Transfer doughnuts and holes to prepared baking sheets. Cover with damp tea towels and let stand until double in size, about 45 min.

Preheat oven to 350 F. Bake doughnuts in the centre of the oven, 1 batch at a time, until golden, about 10 min. Cool completely on a wire rack, about 10 min.

In a flat bottomed bowl, whisk together powdered sugar, melted butter, vanilla and salt then stir in 2 Tbsp of milk, adding additional milk 1 tsp at a time to reach desired consistency and whisk until smooth. Tint with food coloring if desired. Warm in microwave in 6 - 10 second intervals on HIGH power to warm as it begins to set while dipping doughnuts, as needed, whisking after heating.

Dip tops of doughnuts into the glaze. Return doughnuts to wire rack. Top with sprinkles before glaze dries. Allow the glaze to dry at room temperature.