Preheat oven to 400 degrees. Grease a 24-count or 2 (12-count) mini muffin pans and set aside.

In a large sauté pan over medium high heat add 3 tablespoons of butter, the brown sugar, ½ teaspoon cinnamon, and the salt. Bring to a boil. Stir in the diced apples and continue boiling for an additional 3 minutes or until the apples just barely beginning to soften. Remove the pan from the heat and set aside.

In a large bowl, whisk the flour, ½ cup sugar, baking powder, nutmeg, and ½ teaspoon cinnamon.

In a small bowl, stir the milk, eggs and vanilla extract together.

Stir the milk mixture and the cooked cinnamon apples into the dry ingredients until just combined.

Fill the prepared muffin pan with about 2 tablespoons of batter for each donut hole.

Bake for 7 to 10 minutes or until golden brown and the donuts spring back when lightly touched. Allow to cool for 5 minutes in the pan then remove to a cooling rack.

In a small pan over medium heat melt the remaining 4 tablespoons of butter. In a small bowl, whisk together the remaining ½ cup sugar and 1 tablespoon of cinnamon.

Dip the donut holes in the melted butter and roll in the cinnamon sugar. Place on large platter and serve.

Note ~ the donut holes are best served within a couple hours of baking.