In a large mixing bowl, whisk together the flour, baking powder, salt, 1 teaspoon of cinnamon, and 1/2 cup of sugar until well combined.
In another bowl, mix the milk, melted butter, eggs, and vanilla extract until smooth.
Pour the wet ingredients into the dry ingredients and stir until just combined. Do not overmix; a few lumps are okay.
Turn the dough out onto a floured surface and gently knead it a few times until it comes together. Roll the dough out to about 1/2-inch thick.
Using a donut cutter or two round cookie cutters (one larger and one smaller), cut out donuts and holes from the dough.
Heat oil in a deep fryer or large pot to 350°F. Carefully add the donuts to the hot oil, frying a few at a time for about 2-3 minutes on each side or until golden brown.
Remove the donuts from the oil and drain on paper towels.
In a small bowl, mix together the 1/4 cup of sugar and 1 tablespoon of cinnamon. While the donuts are still warm, toss them in the cinnamon sugar mixture until well coated.
Serve warm and enjoy!