Place a cooling rack over a baking sheet and set aside.
Fill a Dutch oven or heavy-bottomed pot with 2 to 3 inches of vegetable oil. Heat over medium heat until the oil reaches 350 degrees F.
Separate the biscuits and cut a hole from the center of each one using a small round cutter. Gently stretch each donut slightly to widen the center hole.
Working in batches, fry the donuts for 1 to 2 minutes per side, or until golden brown.
Transfer the donuts to the prepared cooling rack to drain while you fry the remaining donuts.
Once all of the donuts have been fried, allow them to cool for 2 to 3 minutes.
In a medium bowl, whisk together the powdered sugar, milk, vanilla extract, and salt until smooth.
Dip the top of each donut into the glaze and return it to the cooling rack.
Immediately decorate with rainbow sprinkles, if desired.
Let the glaze set for about 30 minutes before serving.
Notes
Flaky-layer biscuits create the lightest, most donut-like texture.
Keep the oil at 350 degrees F for evenly cooked donuts. Oil that is too cool can make them greasy, while hotter oil can brown them before the centers cook through.
Let the donuts cool for a couple of minutes before glazing so the icing sticks instead of sliding off.
A cooling rack lets the excess glaze drip away and gives the donuts a smooth finish.
Add the sprinkles immediately after glazing so they stick before the glaze sets.
Store leftover donuts in an airtight container at room temperature for up to 2 days.
These donuts are best enjoyed the day they're made.
For a baked version, place the shaped biscuits in a donut pan and bake according to the biscuit package directions before glazing