To make the doughnuts, sift the flour on to a small sheet of baking paper. Bring the water and milk to the boil in a pan. Tip in the flour and beat vigorously with a wooden spoon, stirring until the dough forms a ball and no longer sticks to the sides of the pan.
Remove the pan from the heat and let the dough cool a little. Gradually beat in the eggs, adding just enough to give a piping consistency. Spoon the mixture into a piping bag fitted with a large fluted nozzle.
Preheat the oven to 150°C/300°F.
To cook the doughnuts, heat the oil in a deep fat fryer or a wok until a piece of bread sizzles as soon as it hits the oil.
Squeeze the piping bag over the pan, snipping off 10cm/4in lengths with kitchen scissors. Fry the donuts in batches of 4-6 til golden, then remove them with a slotted spoon, drain on paper towel and keep warm in the oven while making the hot chocolate.
To make the Hot Chocolate:
Break up the chocolate into small pieces, and put in a heat-proof bowl set over a pan of barely simmering water. Leave alone for 10 minutes, until it has completely melted.
Bring the milk to the boil in a small pan. When the chocolate has melted, remove it from the heat and stir in a little milk. Now whisk in the remaining milk (a hand held blender is good for this) until frothy.
Pour into mugs and serve hot. Remove the doughnuts from oven, roll in the sugar and eat immediately, dipping them into the hot chocolate.