01 - Combine warm milk and active dry yeast in a large mixing bowl and let stand for 5 minutes until the mixture becomes foamy.
02 - Whisk granulated sugar, melted butter, large egg, and salt into the yeast mixture until fully combined.
03 - Gradually add all-purpose flour to the wet ingredients, mixing until a soft dough begins to form.
04 - Transfer dough to a lightly floured surface and knead for approximately 5 minutes, until smooth and elastic.
05 - Place dough in a greased bowl, cover, and let rise in a warm area for 1 hour or until the dough has doubled in size.
06 - Roll the risen dough to a thickness of 1/2 inch and use a 3-inch donut cutter or two round cutters to create donut shapes.
07 - Lightly grease the basket of the air fryer using nonstick spray or melted butter.
08 - Place the cut donuts into the greased air fryer basket in a single layer, ensuring enough space between each piece.
09 - Air fry at 350°F for 4 to 5 minutes per side, or until donuts turn golden brown.
10 - Transfer cooked donuts to a wire rack and allow them to cool slightly.
11 - Whisk powdered sugar, milk, and vanilla extract together until smooth; dip each warm donut into the glaze and return to the rack to set.