Preheat Oven and Grease Pan:

Set oven to 400°F (205°C). Mist donut pan with nonstick spray.

Whisk Dry Ingredients:

In a medium bowl, combine flour, 1/2 cup sugar, baking powder, baking soda, 1 teaspoon cinnamon, and salt with a whisk.

Mix Wet Ingredients:

In a large bowl, mix applesauce, oil, buttermilk, and vanilla together.

Fold Batter Together:

Pour dry mixture into wet and fold until barely blended.

Transfer Batter to Bag:

Insert a zip-top bag into a tall jar, folding the edges over the rim. Spoon batter into bag, twist the top, and secure with a clip. Cut off a small corner.

Fill Donut Molds:

Squeeze batter into each donut mold until 3/4 full.

Bake and Cool Donuts:

Bake for 10-12 minutes, until a toothpick inserted comes out clean. Let cool in pan for 5 minutes, then transfer to a wire rack.

Prepare Butter and Cinnamon Sugar:

Put melted butter into a shallow bowl. In another bowl, stir together 1/2 cup sugar and 1/2 teaspoon cinnamon.

Dip in Butter and Coat:

Submerge the top of each donut in butter, allow excess to drip off, then coat in cinnamon sugar. Wait a few minutes, then repeat the dipping for a thicker coating.

Make Icing and Decorate:

In a small bowl, whisk powdered sugar and milk until smooth. Add milk gradually if needed. Optionally add food coloring, then dip or drizzle icing over donuts and finish with sprinkles.