Pour 1 cup of the flour in a medium bowl, add yeast. Set aside.
Heat milk to about 125ºF in a pan over medium-low heat on the stove. Once the desired temperature is reached pour the milk over the flour and yeast in the bowl you set aside.
Mix until well combined, then cover the bowl with a kitchen towel or plastic wrap and set in a warm spot in your kitchen for 30 minutes.
Drain all excess moisture from the grated apples by placing them in cheesecloth and squeezing until all the liquid is out. You can also use the same technique with paper towels. Either option works well for removing moisture.
Uncover the bowl, add apples, butter, sugar, egg and salt to it and mix by hand until combined. Set aside ¼ cup of flour for later (to roll out the dough), then add remaining flour to the bowl. Mix by hand until dough is combined. Turn the dough onto a lightly floured surface and begin to knead by hand. Use the ¼ cup of flour you put aside earlier to add as needed while you are working the dough. Now start to roll the dough over on itself, continue kneading it this way until the dough becomes soft and easy to work with, you can add bits of flour as you go as you feel you need to. It takes about 5 minutes to really work it into a soft, workable dough.
Lightly butter a glass bowl and place the dough inside of it. Cover with plastic wrap, and set the bowl in a warm place in your kitchen, allow it to rise until it doubles in size. This should take anywhere from about 45 to 60 minutes, depending on the warmth of your kitchen.