In a small bowl, mix the warm milk with sugar and yeast. Let it sit for about 10 minutes until the mixture becomes frothy.
In a large mixing bowl, combine the flour and salt. Make a well in the center and pour in the yeast mixture, melted butter, and egg. Mix until a dough forms.
Knead the dough for about 5-10 minutes until it becomes smooth and elastic. Cover the bowl with a kitchen towel and let the dough rise in a warm place for about 1-2 hours.
On a floured surface, roll out the dough into a thin sheet. Cut the dough into small pieces about the size of a pea.
Heat oil in a deep pan. Fry the dough pieces in batches until they are golden brown and crispy. Make sure to stir them occasionally to ensure even cooking.
Remove the Kūčiukai from the oil and drain them on paper towels to remove excess oil.
Serve the Kūčiukai warm with honey.