Lightly spoon flour into measuring cup; level off. In large bowl, combine 1 cup flour, 1/2 cup of the sugar, salt and yeast; blend well.
In small saucepan, heat milk and margarine until very warm (120 to 130°F.). Add warm liquid, vanilla and eggs to flour mixture; blend at low speed until moistened. Beat 2 minutes at medium speed. By hand, stir in remaining 1 1/2 to 2 1/2 cups flour to form a soft dough. Cover loosely with greased plastic wrap and cloth towel. Let rise in warm place (80 to 85°F.) until light and doubled in size, 30 to 40 minutes. (Dough will be sticky.)
Grease 2 large cookie sheets. In small bowl, combine nuts, remaining 1/2 cup sugar and cinnamon; blend well. Drop about 1/4 cup dough into nut mixture; thoroughly coat. Stretch dough to about 8 inches in length; twist into desired shape. Place on greased cookie sheets. Repeat with remaining dough. Cover; let rise in warm place, about 15 minutes.
Heat oven to 375°F. Uncover dough. Bake 8 to 16 minutes or until light golden brown. Immediately remove from cookie sheets; cool on wire racks. Serve warm.