Manual Method: In a large bowl, combine the milk, water, butter, salt and sugar. Add the dried milk, flours and yeast, stirring till the dough starts to leave the sides of the bowl. Transfer the dough to a lightly greased surface, oil your hands, and knead it for 5 to 8 minutes, or until it's smooth and supple. Because of the relatively high fat content of this dough, it's a real pleasure to work with. Transfer the dough to a lightly greased bowl or dough-rising bucket, cover the bowl or bucket, and allow the dough to rise till puffy though not necessarily doubled in bulk, about 1 1/2 hours, depending on the warmth of your kitchen.
Mixer Method: Combine the ingredients as above, using a flat beater paddle or beaters, then switch to the dough hook(s) and knead for 5 to 8 minutes. Transfer the dough to a lightly greased bowl or dough-rising bucket, cover the bowl or bucket, and allow the dough to rise till doubled in bulk, 1 to 2 hours.
Bread Machine Method: Place all of the ingredients into the pan of your machine, program the machine for Manual or Dough, and press Start. When the cycle is finished, remove the dough and proceed as follows.
Lightly grease a 13 x 4-inch pain de mie pan. Transfer the risen dough to a lightly greased work surface, shape it into a 13-inch log, and fit it into the pan. Cover the pan with lightly greased plastic wrap, and allow the dough to rise until it's just below the lip of the pan, 45 minutes to 1 hour, depending on the warmth of your kitchen (it may rise even more slowly in a cool kitchen; don't worry, this long rise will give it great flavor).
Carefully place the cover on the pan, let it rest an additional 10 minutes while you preheat your oven to 350°F Bake the bread for 25 minutes. Remove the pan from the oven, carefully remove the lid, and return the bread to the oven to bake for an additional 20 minutes, or until it tests done; an instant-read thermometer inserted into the center will register 190°F Remove the bread from the oven, and turn it out of the pan onto a rack to cool completely.