Sprinkle 1/4 teaspoon salt and 1/4 teaspoon black pepper evenly over steaks.
Combine cracker crumbs, 1 cup flour, 1 teaspoon salt, 1/2 teaspoon black pepper, red pepper, and baking powder.
Whisk together 3/4 cup milk and eggs. Dredge steaks in cracker mixture; dip in milk mixture, and dredge again in cracker mixture.
Pour oil into a 12" skillet; heat to 360 degrees (do not use a nonstick skillet). Fry steaks 3-4 minutes. Turn and fry 2-3 minutes or until golden. Remove steak to wire rack in a jellyroll pan. Keep steaks warm in a 225 degree oven. Carefully drain hot oil, reserving cooked bits and 1 tablespoon of dripping in skillet.
Whisk together remaining 4 cups of milk, 1/4 cup of flour, remaining 1 teaspoon salt, and remaining 1 teaspoon black pepper. Add milk mixture to reserved dripping in skillet; cook, whisking constantly, over medium-high heat for 10-12 minutes, or until thickened. Serve gravy with steaks.