In a small bowl, dissolve yeast in warm milk and set aside for 15 minutes to proof. This allows the yeast to become active and should appear frothy.
In large bowl, combine 1 cup flour, 1/2 cup sugar and salt; blend well.
Add the melted butter, vanilla and eggs to the yeast mixture, mixing well, and add to the flour/sugar mixture. Blend at low speed until moistened; then beat 2 minutes at medium speed.
By hand, stir in remaining 1 1/2 to 2 1/2 cups flour to form a soft dough. Wrap with greased plastic wrap and then in a tea or cloth towel. Submerge in a large bowl of warm water and let rise until doubled in size, about 45 minutes. (Dough will be sticky.)
Grease 2 large baking sheets.
In small bowl, combine nuts, 1/2 cup sugar and cinnamon; blend well. Drop about 1/4 cup dough into nut mixture; thoroughly coat. Stretch dough to about 8-inches in length; twist into desired shape.
Place on prepared baking sheets. Repeat with remaining dough. Cover; let rise in warm place, about 15 minutes.
Heat oven to 375*F (190*C). Bake 8 to 16 minutes or until light golden brown. Immediately remove from baking sheets; cool on wire racks. Serve warm.