In a large bowl, combine warm milk, active dry yeast, and a pinch of sugar. Stir and let sit for 5 to 10 minutes until foamy.

Whisk in granulated sugar, egg, vanilla extract, salt, and melted butter until fully combined.

Gradually add flour to the wet mixture, mixing until a soft dough forms. Knead for 5 to 7 minutes until smooth and elastic.

Place the dough in a greased bowl, cover, and let it rise in a warm area for 1 to 1.5 hours.

Punch the dough down, transfer to a floured surface, and roll out to 1/4 inch thick. Cut into 2-3 inch squares.

Heat vegetable oil in a deep pot to 350°F (175°C). Fry beignet squares in batches for 1-2 minutes on each side until golden brown.

Remove beignets and let drain on a paper towel. Dust generously with powdered sugar while warm.

Serve immediately and enjoy!