Dissolve yeast in 1/4 cup of the water in large bowl of mixer. Sprinkle 1 tsp of the sugar on top and let stand until bubbly, about 5 minutes. Stir in remaining water, sugar, dry milk and 2 1/2 cups of the flour. Beat on medium speed 2 minutes.
Reduce mixer speed to slow, and add salt, eggs and butter. Blend well. Add remainder of flour a little at a time. When dough begins to get stiff for beaters, change to dough hook. Enough flour is added when mixture forms a soft ball which gathers around dough hook and follows hook around bowl. If mixer doesn't have a dough hook, mix by hand with a spoon. Add flour in a circle around bowl, rather than in the middle.
Knead dough on slow speed 5 minutes or 8 - 10 minutes by hand. Put dough in greased bowl, turning to grease top. Cover with plastic wrap and let rise in warm place until double, 1 1/2 - 2 hours.
Punch down dough, divide into halves.
CARACOIS (SMALL LOAF): Use half of dough. Roll into rope about 25 x 1 1/2 inches. Twist rope and coil into greased round layer pan. 9 x 1 1/2 inches, to form a snail shape.
TRANCA A TRICANA (BRAID LOAF): Use half of dough. Work 1/4 cup dried currants into dough. Cover with towel and let rest 30 minutes. Divide dough into 3 equal parts, roll each into a 14 inch rope. Lay ropes side by side on greased baking sheet. Starting in middle and working out to each end, weave into thick braid. Pinch ends together and turn under slightly.
TO BAKE: Cover and let rise until double, 45 minutes to 1 hour. Heat oven to 350 degrees. Brush top with beaten egg, sprinkle with coarse sugar. Bake until golden brown, 35 to 40 minutes. Makes 2 loaves