Heat water, butter, salt, and sugar together in a medium sized saucepan.
Bring the mixture to a boil and take it off the heat. Let it cool down for 5 minutes or so.
Add egg and mix until it's totally incorporated with the dough.
Heat a thick bottomed saucepan/wok with enough oil for deep frying.
Take 1 tsp of dough and make equal sized small balls from the dough. Pierce a hole in the ball with a toothpick/wooden skewer.
Add these balls to the medium hot oil without overcrowding them (3-4 at a time). Fry the dough balls till golden in color. Keep flipping them in the oil for even color.
Remove them to a plate covered with paper towels to drain excess oil for few seconds and then immediately roll them in cinnamon sugar.