In a large bowl mix together the sugar, baking powder, cinnamon (or nutmeg) and salt, then add the egg, milk and melted butter and combine.
Add 1 1/2 cups of flour and beat, starting on low speed increase to medium (with dough hook) combine, then add remaining flour, the dough will be soft and a little sticky (but firm enough to handle), if too sticky add more flour a tablespoon at a time.
Wrap the dough in plastic and chill for one hour.
Heat 2 inches of oil in a medium heavy pot (or follow the directions if using a deep fryer) using a candy thermometer until temperature reaches 360-370F (180-185C).
Roll dough on a lightly floured surface to 1/2 inch thick (1.2 cm), cut out with a donut cutter (be sure to fry the donut holes also).
Carefully drop the donuts two at a time into the hot oil (keep the temperature at 360F or as close as possible). Flip the donuts as they puff up, turn a couple of times as they fry approximately 2-3 minutes, or until golden.
Remove with a slotted spoon and let drain for a 30-60 seconds on a plate lined with paper towels. Roll warm donuts in cinnamon sugar. Serve immediately. Enjoy!
In a small bowl combine well the sugar and cinnamon.