Sift flour, baking powder, salt and sugar together into bowl. Lightly stir in milk. Add more flour as necessary to make a dough that can be handled.
Turn dough out onto floured surface, and knead and work dough with floured hands until smooth. Pinch off fist-sized lumps and shape into disks. Each will have its own characteristic shape. (Shape affects the taste because of how it fries.) For Indian tacos, disk must be rather flat with a depression, almost a hole in the center of both sides. Make it that way also if fry bread will have sauce over it. Smaller, round disks are for serving on plates.
Deep-fry in vegetable oil (about 375°s; F) until golden and done on both sides, about 5 minutes. Drain on absorbent paper toweling. Makes 8 to 10 small disks or 5 large ones for Indian tacos.
Place all ingredients except 1/4 cup of the butter in food processor and process until smooth. Add remaining butter and process a moment or two.
Serve with warm fry bread.
Makes about 1 cup.