Preheat the oven to 350 degrees F. Line two baking sheets with parchment paper.
Using an electric mixer, cream together the butter, 1/3 cup sugar, milk, and the vanilla in a medium size mixing bowl until light and fluffy. Add the flour and baking powder and beat until combined.
Flour a clean work surface and dump the dough out onto the surface. Roll the dough out into 1/8 inch thick circle. Using a 2 inch circle cookie cutter, cut as many cookies out as possible. Then using a smaller 1/2 inch to 1 inch circle cookie cutter, cut the centers out of each cookies to make a doughnut shape. Place the cookies on the prepared baking sheet and repeat with the remaining dough, re-rolling it to create as many cookies as you can. Place the trays of cookies in the freezer for 10 minutes.
Bake the cookies for 8-10 minutes or until lightly golden on top. In a small bowl combine the remaining 1/4 cup sugar and the cinnamon. As the cookies come out of the oven, dip each warm cookie in the cinnamon sugar to completely coat one side. Place on a cooling rack and let cool fully before topping.
Spread the coconut out on a parchment lined baking sheet and bake for 10 minutes, tossing the coconut halfway through cooking. Watch the coconut closely as it can go from toasted to burnt very fast. Let the coconut cool and then add to a mixing bowl.
In a small sauce pan, combine 1/2 cup dulce de leche with the milk and melt together over low heat until smooth. Remove from the heat and stir in 1 teaspoon vanilla. Pour the dulce de leche mixture over the toasted coconut and mix well.
Take the remaining dulce de leche in the can and spread a little over the top of each cookie. Now press the coconut mixture on top of the cookie to gently adhere. Place back on the cookie sheet and repeat with the remaining cookies. Place the cookies in the freezer for 10 minutes.
Melt the chocolate. Remove the cookies from the freezer and dip the bottom half of each cookie into the melted chocolate allowing any excess to drip of. Place the cookies back on a parchment or wax lined baking sheet as you finish. Using a spoon or fork , drizzle the top half of each cookie with chocolate. Place the pan of cookies in the fridge for 10-20 minutes to allow the chocolate to set...and then EAT!!! :)
Cookies can be kept in the fridge or at room temperature in a cool, dry place.