In a small mixing bowl, whisk together 1/2 cup granulated sugar and cinnamon. Set aside.
Heat 1-1/2 inches of oil in a large pot over medium heat to 360 degrees (Watch this closely - through the entire cooking process - important to maintain your temperature).
In a separate medium saucepan combine milk, water, butter, 2 tsp sugar, and salt and bring mixture just to a boil.
Once boiling, remove from heat and immediately stir in vanilla and flour.
Stir together with spatula & smooth any lumps. Stir until mixture comes together and is smooth. Transfer to a piping bag fitted with a large open star tip
Pipe 2-4 inches of dough out into oil
Cut dough & to allow dough to drop into oil
I recommend working in small batches as the dough likes to travel in the oil & come together. Allow churros to fry until golden brown - remove with a wire strainer
Drain on a wire rack for a couple minutes.
Toss warm, drained churros into sugar mixture to evenly coat.
Serve warm with dipping sauce if desired.