Step one: Prepare the xurros
In a medium saucepan, combine the milk, 1/2 cup of water, and the butter, and bring to a simmer over medium heat. Add the flour, stirring with a wooden spoon until a dough forms into a ball, leaving a thin coating of cooked flour on the bottom of the saucepan, 2 to 3 minutes. When you hear the dough begin to sizzle very softly, it has been cooked and stirred enough. Carefully transfer the hot dough to a stand mixer fitted with the paddle attachment. Mix on medium-low speed and, with the mixer running, add the eggs one at a time. Continue mixing until the dough is shiny, thick, and falls in golden ribbons from the paddle, 1 to 2 minutes.
Transfer the dough to a large pastry bag fitted with a large star tip (or a resealable bag with a corner snipped off). Combine the sugar and ground anise seed in a medium shallow bowl for coating the xurros.