Combine the warm milk, yeast, and 1 tsp. of sugar. Let sit, covered until foamy (about five minutes).
In a large bowl, stir together the remaining sugar and flour. Add to it your milk mixture, egg, butter, and vanilla and stir until well combined and no dry flour remains.
Dump your dough onto a floured surface and knead for 5 minutes, until dough is no longer sticky.
Allow your dough to rise for 30 minutes
Roll out the dough into a ½ inch thick sheet and cut out 4-inch circles
Use a knife to cut a smaller circle out of the center of each donut.
Allow your cut donuts to rise for another 30 minutes. While they rise, preheat the air fryer for 5 minutes at 350°F.
Spray your air fryer with cooking spray or place a small piece of parchment paper on the bottom. Place 4-5 donuts in the basket and fry for 3-5 minutes. Remove to a platter and repeat with the remaining donuts.
Add the donut holes to the basket and fry for 2-3 minutes.
For the Glaze
In a small bowl add the powdered sugar, cocoa powder, vanilla and water and whisk until smooth.
Dip your donuts into the glaze after they finish cooking. Top with sprinkles and enjoy!
Video
Notes
Make sure your milk isn't too hotDon't overcrowd your basket. Depending on the size you should be able to get 3-4 donuts at a time.Don't skip the rise times, that's what helps make these Air-Fried Donuts so light and fluffy.To Fry in oil: Fill a heavy-bottomed pot with a couple of inches of frying oil and heat until it reaches about 360°F. Gently place a few of your donuts into the oil and let fry for about one minute per side. Once golden, remove from the oil and let cool on a drying rack before glazing.For a sugar glaze: Melt 6 tablespoons butter in a saucepan over medium low heat. Turn off the heat and stir in 2 cups powdered sugar, 2 teaspoons vanilla until combined. Add in hot water 1 tablespoon at a time until desired consistency.