In small saucepan, boil water and liqueur 3 minutes and set aside.
Place flour in large bowl and make well in center. Add sugar, egg and margarine. With fingertips, mix together until texture resembles coarse meal. Add water-liqueur mixture by Tbsp as needed, mixing and kneading with hands until dough is pliable. Lightly grease glass bowl, add dough and let rest 20 minutes. Dough will rise slightly.
Divide dough into 12 balls, about 1 1/2 inches in diameter. Flour working surface and roll balls into 2-inch diameter circles. With fingers, stretch dough until almost transparent, without breaking it, until about 5 inches in diameter.
Meanwhile, heat 1/2 inch of oil in large skillet. When very hot, add 1 bunuelo. After 15 to 20 seconds, flip over. With spoon, baste top surface with grease so it browns until lightly golden and puffed, about 30 seconds. Transfer to plate covered with paper towel to absorb excess oil.
Make mixture of sugar and cinnamon in large bowl or on plate. Roll bunuelos in sugar-cinnamon mixture and dust with powdered sugar.Makes 12 bunuelos Source: