Add the warm milk, granulated sugar, and yeast to the bowl of a stand mixer and whisk to combine. Allow the mixture to sit for 5 minutes, or until the yeast is foamy and fragrant.

Next add the melted butter, egg, and vanilla. Whisk again to combine.

Attach the dough hook to the stand mixer and set the speed to low (Kitchenaid #2). Slowly add the flour and salt. Scrape down the sides of the bowl as needed.

Continue mixing until the dough pulls away from the sides of the bowl and begins to form a ball. If the dough is too wet (sticking to the sides of the bowl) add more flour one tablespoon at a time until the dough begins to pull away from the sides of the bowl.

Knead the dough (on low speed for 5 minutes if using a stand mixer) until the dough is smooth and just barely sticks to your hands. Transfer the dough to a lightly oiled bowl and then place it in a warm spot to rise until doubled in size– about 1 hour.

Punch the dough down slightly and then transfer it to a lightly floured surface. Use a floured rolling pin to roll the dough until it is ½" thick. Cut out large round circles (3") and then use a smaller (1") round cookie cutter to cut out the center of the donuts.

Place the donuts and donut holes on a parchment lined baking sheet and allow them to rise for an additional 30 minutes, or until they have increased in size by about 50%. In the meantime, preheat your air fryer to 350ºF/176ºC for 5 minutes.

Lightly grease your air fryer with nonstick baking spray and add a few donuts (or donut holes) to the basket. Make sure not to overcrowd the air fryer! Spray the tops of the donuts with nonstick baking spray. Cook the donuts (or donut holes) for 5 minutes, or until they are light brown and a toothpick inserted into the donut comes out clean. Continue cooking the donuts in batches. Garnish the donuts with your favorite glaze and enjoy!