Melt butter in a small/custard bowl, covered to prevent splatters, in the microwave 15-30 seconds or until melted.
Measure WARM water in a large glass measure cup & add butter. Whisk in dry powdered milk until dissolved. Add yeast & sugar, stir, & wait until it bubbles, about 4-5 minutes.
In a large bowl, whisk the egg & vanilla. Add yeast mixture. In a separate bowl combine cinnamon, salt, baking powder & flour. Add dry ingredients to wet ingredients with a large spoon. Stir the mixture in the bowl until it comes together to form a ball. Work the dough on a floured surface for a few minutes.
Knead in cinnamon chips & then let the dough rest in a greased bowl, covered with a towel or saran wrap until double in size.
Punch dough down & shape as desired. Place on a greased cookie sheet or in a greased bread pan. Cover again with a towel or plastic wrap & let rise until double in size.
Bake at 350*F for 30 minutes. It should be nice & golden brown. Let cool before slicing & serving. Makes great french toast or just to eat plain.