Heat the milk until it's luke warm and add the sugar, stir until dissolved.
Add the yeast to the milk and stir in, allow to sit for 20 minutes until foamy.
In a separate bowl mix the flour with the salt and cinnamon.
Add the milk, butter and egg to the flour and mix until it forms a dough.
Before kneading, divide the dough into 4 or 5 depending on how many colours you want to use.
Apply a few drops of the desired colour food colouring to each section of dough and knead in.
Knead the dough for 10 minutes until it becomes stretchy and elastic.
Place the dough balls into clean, greased bowls and cover. Leave somewhere warm for an hour until they have doubled in size.
Once risen, knead each dough ball again knocking out the air as you go.
Cover each section of dough to stop it drying out as you prepare each one individually.
On a lightly floured surface roll each piece of dough out thinly, brush each layer with a little water before the next layer and place on top of each other, then roll it together to bind the layers.
Using a ring doughnut cutter, cut out the doughnuts and place on a lined, greased baking tray with space between each one to allow them to expand.
Place the tray inside a plastic bag and leave for another hour.
Heat the oil in a saucepan to around 170-180 C and fry each doughnut for 2-3 minutes on each side until golden.
Remove from the oil and drain the excess oil.
Leave the doughnuts to cool.
Once the doughnuts have cooled you can make the glaze.
Mix the icing sugar with the vanilla and water and add the desired food colouring (optional).
Pour the glaze over the doughnuts, allow the glaze the drain and begin to set and then dip them into the multi-coloured sprinkles.