Stir the yeast and a pinch of the sugar into the warm water. Let it stand 5 to 10 minutes until foamy.
In a large bowl, mix the warm milk, remaining sugar, melted butter, egg and salt. Add the yeast mixture and 3 cups of flour and stir until shaggy.
Add the remaining flour a little at a time until the dough pulls away from the bowl but is still slightly tacky. Knead 6 to 8 minutes with a dough hook (or 10 minutes by hand) until smooth and springy.
Place in a greased bowl, cover and let rise in a warm spot for about 1 hour, until doubled.
Punch down the dough and roll it out on a lightly floured surface to 3/4 inch (2 cm) thick. Fold in half, roll out again to the same thickness, then cut into 2 inch (5 cm) squares.
Arrange the squares just touching in a greased 9x13 inch pan (and a small pan for extras). Cover and let rise 30 to 45 minutes until puffy. Preheat the oven to 350°F (175°C).
Bake 15 to 18 minutes until light golden on top. Brush with melted butter immediately and rest 5 minutes.
For the honey butter, beat the soft salted butter until fluffy, then beat in the honey, powdered sugar and cinnamon until smooth. Serve with the warm rolls.