In large bowl, with electric mixer, stir 1/2 cup warm water, yeast, 2 TBSP sugar and 1/4 tsp salt.
Add 1 cup flour and the butter; mix on medium speed for 4 minutes.
Add remaining 2 cups flour; mix for an additional 2 minutes.
Grease a large bowl with non stick spray or butter and place the dough on it, turning it once.
Cover with plastic wrap and let stand for 1 hour in a warm place until it doubles in volume.
Preheat oven to 375°F.
Line baking sheet w/ aluminum foil or parchment paper.
When the dough has fully risen, punch it down and transfer to a floured surface.
Roll the dough out to a 12x16 inch rectangle and spread evenly with the warmed Nutella, leaving a 1 inch band around the edge, bare.
Beginning at the long end, tightly roll up the dough like a newspaper, forming a 16 inch long log.
Brush the ends with a little water and bring them together to form a ring.
Transfer ring to prepared baking sheet.
Using a sharp knife, sprayed with non stick cooking spray, slice the ring into 12 individual buns- being sure not to cut all the way through so that the buns are still connected, allowing 1 inch between each slice.
Gently separate them, so they rest against each other like dominoes.
Brush the ring with 2 TBSP water and sprinkle with remaining 2 TBSP sugar.
Bake for 35-45 minutes until golden brown.
Let cool slightly before serving.
---To Warm Nutella---.
In microwave, heat on high for 5 seconds in a microwavable bowl.