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In a heavy and wide saucepan, stir together the water, butter and salt and let it boil while stiring it the whole time. Remove from heat and add the sifted flour with wooden spoon until no flour can be seen anymore and it turns into a white clump.
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In another bowl, combine the eggs and vanilla. Now add this mix to the saucepan and stir very well with an electric mixture until the eggs are incorporated and mixture is clump again.
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Preheat oven to 220°C and prepare baking sheets. Transfer the dough to a pastry bag. Now pipe dough in any shape you like (the originals are long thin lengths).
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Bake for 30-40 minutes (depends on your oven!). Then remove from oven and tranfer them to a wire rack. Combine sugar and cinnamon and roll churros in this mixture.
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For the dip: Heat chocolate and nougat until smooth. Churros are best when hot and on the day they are made. To get them crispy again put them on top of your toaster.