if you want, make the churros the night before. Just place the dough in a plastic container, lay a piece of wetted parchment on the surface, replaced the container lid and chill in refrigerator.Source unknown
pour the milk for the sauce into a small pan and bring to a boil. Remove from the heat, add the chili, and let infuse for 30 minutes.
To make the churros, pour 1 cup water into a medium pan, add the salt and 1 tablespoon of the sugar, and bring just to a boil.
Take the pan off the heat, add the flour, and mix briefly. Return the pan to low heat and stir until the mixture comes together as a rough ball that leaves the sides of the pan almost clean. Let cool for 15 minutes.
Beat the eggs and vanilla together in a bowl. The remaining sugar and cinnamon together in a second small bowl and set both aside.
To finish the sauce, strain the milk, discard the chili, then pour the milk back into the pan. Add the remaining sauce ingredients and heat together, stirring, until smooth and glossy but not boiling.
Gradually beat the egg mixture into the churros until smooth. Use a food processor if you have one. Spoon the mixture into a pastry bag fitted with a 1/2 inch wide plain tip.
Pour the oil into a large pan to a depth of about 1 inch. Heat to 340° on a kitchen thermometer. Alternately, pipe a tiny amount of the churros mixture into the oil. If the oil bubbles instantly it is ready. Pipe spirals "S" shapes or squiggly lines into the oil in small batches, snipping the end of the churros with kitchen scissors. Cook for 2 to 3 minutes, until they float and are Golden all over, turning over if needed.
Lift out of the pan with a slotted spoon and drain on paper towels. Continue piping and frying until all the mixture is used.
Transfer the churros to plate lined with nonstick parchment paper and sprinkle with the cinnamon sugar.
Reheat the chili sauce if needed, then pour into a shallow dipping bowl or individual bowls and serve with a warm churros.