In a medium saucepan over low heat, combine water, 2 teaspoons sugar and evaporated milk; heat to 110F.
Pour into a 2-cup glass measuring cup.
Stir in yeast.
Let stand until foamy, 5 to 10 minutes.
In a food processor fitted with the steel blade, combine 3 cups of flour and all remaining ingredients except oil and powdered sugar.
Turn on and off 3 or 4 times to blend ingredients.
Add yeast mixture.
Turn on and off 4 or 5 times to bring dough together.
Check consistency of dough.
It should be fairly smooth and nonsticky.
If additional flour is needed, add 1 to 2 tablespoons at a time; process just until blended.
Process 15 seconds to knead dough.
Turn out dough on a lightly floured surface; form into a smooth ball.
Lightly oil a large bowl.
Place dough in oiled bowl, turning to coat all sides.
Cover with plastic wrap.
Let rise in a warm, draft-free place until doubled in bulk, about 1-1/2 hours.
Punch down dough.
Turn out onto a lightly floured surface.
Roll out dough into a rectangle about 1/2 inch thick.
Working at a diagonal to rectangle, with a sharp knife, cut dough into 2-inch-wide strips, moving from left to right.
Starting at top left and moving toward bottom of dough, cut dough diagonally into 2-inch-wide strips to form diamond shapes.
Carefully place all completed diamonds 1/2 inch apart on ungreased baking sheets.
Cover loosely with plastic wrap.
Gather up remaining dough scraps; knead together.
Cover loosely with plastic wrap; let rest 15 minutes to relax dough.
Roll out and cut as before.
Repeat until all dough has been used.
Cover beignets loosely with plastic wrap; let rise in warm, draft-free place until almost doubled in bulk, 45 minutes.
In a large saucepan, heat 3 inches oil to 365F or until a 1-inch bread cube turns golden brown in 60 seconds.
Carefuylly slide beignets into hot oil, 3 or 4 at a time; do not crowd.
Fry until puffy and golden brown on both sides, turning once with tongs.
Cooking time is about 2 to 3 minutes per side.
Remove with a slotted spoon; drain on paper towels.
Sift powdered sugar over hot beignets; serve hot.
Makes about 36.