Add water, sugar, and yeast to the bowl of a stand mixer or to a large bowl. Stir.
Let yeast mixture sit for 5-10 minutes, or until foamy.
Stir in vanilla, egg, butter, and dry milk until combined.
Stir in 2 cups flour, cinnamon, salt, and baking powder.
Continue adding flour by 1/4 cup until a soft, smooth dough forms.
Stir in cinnamon chips.
Cover, and let dough rise until it's nearly doubled in size, about 60-90 minutes.
Gently deflate the dough, and form it into an 8-inch log.
Place the dough into a greased 8.5x4.5-inch loaf pan.
Cover the loaf with greased plastic wrap, and let the bread to rise until about 1-inch over the rim of the pan, about 30-40 minutes. Do not let the bread rise beyond that point.
Toward the end of the rising time, preheat the oven to 350F.
Bake the bread for 20 minutes.
Tent lightly with aluminum foil.
Continue baking for about 15-25 minutes, or until the crust is golden brown, and the interior of the measures 190F on a digital thermometer.
Remove the bread from the oven.
Let sit in pan for about 5-10 minutes.
Remove from pan, and allow to cool to room temperature on a wire cooling rack. .
Warm water: The water should be warm but not too hot. If the water is too hot, it will kill the yeast. If you don't have a thermometer, then you can test it. If it's too hot for you, the water is too hot for the yeast.
Yeast: For this recipe, you'll need slightly more than 1 envelope of yeast.
Egg and butter: Using room temperature butter and egg helps them to mix in better. It also helps to keep the dough a little warmer, which helps it to rise better.
Flour: You may not need to use the full amount of flour, and that's ok. Go by the look/feel of the dough.