In a 1 cup measuring cup, stir together yeast, 1 tsp sugar, and 1/2 cup water; let stand for 5 minutes.
Process flour,remaining sugar and salt in a food processor 10 seconds or until blended. Add butter; process 10 seconds or to a consistency of coarse meal.
Add milk and 2 eggs to yeast mixture. With processor running, pour egg mixture through food chute. Process dough 20 seconds or until dry ingredients are moistened. Continue processing 1 minute. (Dough will be soft). Place dough in a well-greased bowl, turning once to grease top. Cover and let rise in a warm place free from drafts, 1 hour or until doubled in size. Punch dough down and divide into fourths; shape each portion into 6 (1 1/2 inch) balls. Place in a lightly greased 9 x 13 inch pan. Cover and let rise in a warm place for 40 minutes.
Preheat oven to 375 degrees. Beat together 1 tblsp water and remaining egg; carefully brush over rolls and sprinkle with sesame or poppy seeds.