Heat milk in a small saucepan to 110 degrees or until warm to the touch. Fit the steel knife blade or plastic knife into the work bowl. Combine warm milk and sugar in the work bowl. Sprinkle yeast over mixture. Let stand until foamy, about 5 minutes. Add butter or margarine, salt and egg. Process until butter or margarine is completely melted, 10 to 15 seconds. Add 3 1/2 cups flour all at once and process until dough forms a smooth ball. If dough is too moist to knead, add more flour a little at a time, processing between each addition. When dough is at a workable consistency, process one minute to knead. If motor slows or stops, turn off machine, remove dough and knead by hand on a floured surface for 2 minutes. Place dough in a greased large bowl. Cover with a damp cloth towel and let rise in a warm place bout 1 hour until doubled in bulk. Grease a loaf pan. Punch down dough and shape into a loaf. Place in prepared pan. Cover with a damp cloth and let rise again about 1 hour until doubled in bulk. Preheat oven to 400º. Bake loaf until crust is gold brown, 30-35 minutes. Remove from oven and let cool in pan 10 minutes. Remove from pan and cool completely on a rack before slicing. Makes 1 loaf.

Serving Ideas: Basic Rolls: punch down dough after first rising and divide into eighteen 1 1/2-inch pieces. Roll each piece between your hands to make smooth balls. Place on a greased baking sheet. Cover with a damp cloth and let rise in a warm place until doubled in bulk about 45 minutes. Preheat oven to 400º. Bake rolls 15-20 minutes.

Cinnamon Rolls: After first rising, roll dough into a rectangle. Spread with butter. Sprinkle with cinnamon and sugar. Roll up jelly roll fashion and cut into 12 pieces. Lay in a 13x9 pan with sides touching. Let rise until double in bulk, about 1 hour. Bake at 400º until golden brown. Ice with powdered sugar frosting.