Combine milk, 1/4 cup butter, 3 tablespoons plus 2 teaspoons sugar, and salt; stir until butter melts. Cool mixture to lukewarm (105° to 115°).
Combine yeast, remaining 1 teaspoon sugar, and warm water; stir well, and let stand 5 minutes or until bubbly. Add to cooled milk mixture, stirring well. Gradually add flour, stirring well.
Turn dough out onto a lightly floured surface; cover and let rest 15 minutes. Knead 5 minutes or until smooth and elastic. Place dough in a greased bowl, turning to grease top. Cover and let rise in a warm place (85°), free from drafts, 1 1/2 hours or until doubled in bulk.
Turn dough out onto a floured surface; roll into a 16- x 8-inch rectangle. Cut into two 8-inch squares. Brush 1/4 cup melted butter over dough. Combine 1 1/2 cups sugar and cinnamon; stir well. Sprinkle 2 tablespoons of sugar-cinnamon mixture over each square. Roll up jellyroll fashion; continue rolling until each roll is about 15 inches in length. Moisten edges with water to seal. Cut rolls into 1/2- inch slices.
Sprinkle 1 cup of sugar-cinnamon mixture in the bottom of 2 well-greased 8-inch square baking pans. Place rolls, cut side down and 1/2-inch apart, over sugar mixture. Brush tops of rolls with 2 tablespoons melted butter, and sprinkle with remaining sugar-cinnamon mixture. Using a fork, gently lift center of rolls to form a peak.
Cover and repeat rising procedure 1 1/2 hours. Bake at 350° for 25 minutes or until lightly browned.