Instructions:
Activate the Yeast:

In a small bowl, combine the warm milk, 1 tsp sugar, and yeast. Stir and let it sit for 5-10 minutes until it becomes frothy.
Make the Dough:

In a large bowl, combine the flour, salt, and nutmeg. Make a well in the center.
Add the eggs, softened butter, vanilla extract, and the yeast mixture into the well of the flour mixture.
Stir everything together until a sticky dough forms. You can use a stand mixer with a dough hook or mix by hand.
Knead the Dough:

Transfer the dough to a floured surface and knead for about 5-7 minutes until the dough is smooth and elastic.
Place the dough in a lightly oiled bowl, cover with a clean kitchen towel or plastic wrap, and let it rise in a warm place for about 1-1.5 hours or until it doubles in size.
Shape the Doughnuts: