In a large bowl. combine the milk, water, and yeast; set aside. In a large bowl, combine the flour,sugar and salt. Cut in butter until mixture resembles coarse crumbs. Add egg to yeast mixture; beat into dry ingredients until blended. Cover and refrigerate for at least 2 hours. Punch dough down; turn onto a lightly floured surface. Knead 8-10 times. Cover and let rest for 10 minutes. Roll into an 18x10-inch rectangle. Brush with 2 Tablespoons butter. Combine sugar and cinnamon; sprinkle 1 cup over dough. Beginning with long side roll up jelly-roll style, pinch edges to seal. Cut into 1 inch slices. For each elephant ear, sprinkle a small amount of the remaining cinnamon-sugar on a piece of waxed paper. Place a slice of dough on cinnamon- sugar; roll into a 5-inch circle.
Place sugared side down on an ungreased baking sheet. Brush with some of the remaining butter; sprinkle with pecans and cinnamon-sugar. Bake at 375^ for 9-11 minutes or until golden brown.