Step 1: In a large bowl, combine the warm milk, yeast, and 1/4 cup granulated sugar. Stir gently and let sit for 5-10 minutes until the mixture is frothy, indicating the yeast is active.
Step 2: Add the slightly cooled melted butter, egg, and salt to the yeast mixture. Mix well. Gradually add 3 cups of the all-purpose flour, mixing until a soft, slightly sticky dough forms. Add more flour, about 1/2 cup at a time, until the dough is manageable but still soft.
Step 3: Turn the dough out onto a lightly floured surface. Knead for 5-7 minutes, until the dough is smooth and elastic. It should spring back slowly when poked.
Step 4: Place the dough in a lightly oiled bowl, turning once to coat all sides. Cover the bowl with plastic wrap or a clean kitchen towel and let it rise in a warm, draft-free place for 1 to 1.5 hours, or until it has doubled in size.
Step 5: While the dough is rising, prepare the fillings. For the cinnamon sugar filling, in a medium bowl, cream together the 1/2 cup softened butter, 1/2 cup granulated sugar, and 2 tablespoons ground cinnamon until well combined and smooth.
Step 6: For the cream cheese layer, in a separate bowl, beat together the 8 oz softened cream cheese, 1/4 cup granulated sugar, and 1 teaspoon vanilla extract until light, fluffy, and completely smooth.
Step 7: Once the dough has doubled, gently punch it down to release the air. Turn it out onto a lightly floured surface and roll it into a large rectangle, approximately 18x12 inches.
Step 8: Spread the cinnamon sugar butter mixture evenly over the rolled-out dough, leaving a small border (about 1/2 inch) on one of the long edges.
Step 9: Carefully spread the cream cheese mixture over the cinnamon sugar layer. It doesn't need to be perfectly smooth or separate; a slight swirl is fine.
Step 10: Starting from the long edge opposite the small border, tightly roll the dough into a log. Pinch the seam firmly to seal it.
Step 11: Using a sharp knife or unflavored dental floss, cut the log into 12-14 equal slices, each about 1 to 1.5 inches thick.
Step 12: Grease a 9x13-inch baking dish. Arrange the sliced rolls in the prepared dish, leaving a little space between each roll for expansion.
Step 13: Cover the dish loosely with plastic wrap or a clean kitchen towel and let the rolls rise again in a warm place for another 30-45 minutes, or until they look puffy and have nearly doubled in size.
Step 14: While the rolls are completing their second rise, preheat your oven to 375°F (190°C).
Step 15: Bake the rolls for 20-25 minutes, or until they are golden brown on top and cooked through. If they start to brown too quickly, you can loosely tent them with aluminum foil.
Step 16: Remove the rolls from the oven and let them cool slightly in the pan before serving. These rolls are truly best enjoyed warm!