In a large bowl, combine the flour, sugar, baking power and salt. Make a well in the center, then add the milk, egg and vanilla. Stir the batter, just until almost combined. Add in the sprinkles and stir just until combined. The dough will be sticky. Cover the bowl and refrigerate for 30 minutes. (You could probably skip the refrigerating if you really need to, but the dough is much easier to roll out if it is cold.)

Heat 2-3 inches of oil in a heavy pot or deep fryer to 375ºF.

While the oil is heating, generously dust a work surface with flour. Using a spatula, turn the dough out onto the flour. Sprinkle some more flour on top. Using a rolling pin or floured hands, roll the dough out to about 1/2” thick. Use a donut cutter or 2 different sized circle cutters to cut out the donuts. Re-roll the scraps as needed, but try not to mess with the dough too much, as the donuts will become tougher the more you mess with the dough.

When the oil is hot, add a few of the donuts to the oil. Be careful not to overcrowd the pan. Fry until they are golden brown, flipping as needed, 1-2 minutes per side. (If they get brown faster than that, turn the heat down, and if it is taking longer, turn the heat up.) Remove to a paper-towel lined plate to let the donuts drain and cool off.

To make the glaze, place the powdered sugar in a bowl and stir in 3 tablespoons of cream, the hot water and the vanilla. If needed, add more cream until the glaze is thin enough to dip the donuts in, but thick enough to stick to the top. (I like to make the glaze thicker for the donuts, but I thinned it out for the donut holes and completely covered them in glaze.) Dip the tops of the donuts in the glaze, then dip in sprinkles. Let the glaze harden before serving, about 15 minutes.