In a large mixing bowl, combine 1 cup of all-purpose flour, 2 tablespoons of white granulated sugar, 1/4 teaspoon of salt, 1 teaspoon of baking powder, and 1/2 teaspoon of baking soda. Whisk these dry ingredients together until they are well mixed.
In another bowl, whisk together 2 tablespoons of canola oil, 1 large egg, 2 teaspoons of pure vanilla extract, and 1/2 cup of milk until smooth.
Pour the wet mixture into the dry ingredients. Stir gently until just combined. Do not overmix; a few lumps are perfectly fine.
Add 1/3 cup of melted Nutella to the batter. Gently fold it in, creating swirls but not fully mixing it in. The goal is to have pockets of Nutella in each donut hole.
In a frying pan or deep fryer, heat enough oil for frying (about 2 inches deep) over medium heat. You can test if the oil is ready by dropping a small amount of batter into it; if it sizzles and rises to the surface, you’re good to go!
Using a cookie scoop or tablespoon, carefully drop spoonfuls of the batter into the hot oil. Fry until they are golden brown, about 2-3 minutes on each side. Be sure not to overcrowd the pan.
While the donut holes are frying, mix together 1/3 cup of white granulated sugar and 2 teaspoons of ground cinnamon in a shallow bowl.
Once fried, remove the donut holes using a slotted spoon and let them drain on paper towels for a moment. While they are still warm, roll them in the cinnamon sugar mixture until fully coated.