Preheat the oven to 425. Spray a donut pan with non-stick cooking spray.
In a large bowl, sift together the flour, sugar, baking powder and salt.
In a small bowl, whisk together the milk, egg and melted butter.
Pour the wet mixture into the dry and mix just until no lumps remain.
Scoop batter into the prepared muffin pan, filling each donut cavity ⅔ full.
Bake for 7-8 minutes or until lightly golden.
Remove from the oven and let cool for 10 minutes before removing to a wire rack.
Place foil or parchment on a large baking sheet and place the wire rack of donuts on top.
Microwave the caramel dip for 30-45 seconds or until smooth.
Dip each donut into the caramel dip and then coat with sprinkles.
Discard foil/parchment for easy clean up.
Store donuts in an airtight container for 2 days, but best eaten the day of.