Preheat oven to 425°F (220°C). Grease a 6-cup muffin pan and place a small dish of hot water on the lower oven rack to create steam.
Make cinnamon sugar coating by mixing sugar, cinnamon and nutmeg. Set aside.
In a bowl, whisk together sugar, warm coconut milk, and vanilla for about 30–40 seconds until slightly aerated.
Slowly whisk in melted coconut oil.
Add flour, baking powder, baking soda, salt, cinnamon, and nutmeg. Stir just until combined.
Mix in applesauce. Stir in the vinegar last. Let the batter rest 5 minutes.
Fill muffin cups almost to the top for tall bakery domes.
Bake 5 minutes at 425°F, then reduce oven to 350°F (180°C) and bake 13–15 minutes more, until the tops are golden.
Let cool for only 5 minutes.Before coating, poke 3–4 small holes in the muffin with a toothpick.This helps the oil soak in slightly and makes them taste exactly like donut shop dirt bombs. While muffins are still warm, brush with melted coconut oil and roll generously in cinnamon sugar. Let sit for 10 minutes, then coat once more for a thick bakery-style crust.