Activate yeast: In a large bowl, combine warm water and instant yeast. Let sit for 5 minutes until slightly foamy.
Mix dry ingredients: In another bowl, whisk together flour, sugar, powdered milk, salt, nutmeg, and baking powder.
Combine & mix: Add dry ingredients to the yeast mixture. Stir until a sticky dough forms (it should be thicker than pancake batter).
Let rise: Cover the bowl with a clean cloth and set aside in a warm place for 45 minutes to 1 hour, until doubled in size.
Heat oil: In a deep pot, heat oil to 350°F (175°C). Test by dropping a small bit of batter — it should sizzle and float.
Fry puff puff: Using your hand or a small scoop, drop balls of dough into the oil. Fry in batches until golden brown, turning occasionally (about 4–5 minutes).
Drain & serve: Remove with a slotted spoon and place on a paper towel-lined plate or wire rack. Serve warm and enjoy!