In a small bowl if using a bread machine, or in the bowl of a standing electric mixer fitted with a dough hook, mix a 1/3 cup of the warm water (105-115 degrees) with the yeast and let stand until foamy.

Add the remaining cup of warm water along with milk, sugar & melted butter and swirl to dissolve the sugar. (If using a bread machine add mixture to bread machine at this point and continue). Add flour and mix on dough cycle or med-low speed. Remove dough from bread machine once it forms a nice a firm, pliable dough ball. Add more flour if necessary.

Turn dough out onto a lightly floured table and knead for 2 minutes. Roll into a 2 foot long log and cut into 12 even pieces. Cover dough with plastic and a damp cloth and let sit for 10 minutes.

Pat dough into rolls or form knots and arrange on a lightly floured surface about an inch apart and cover with lightly oiled plastic wrap. Let the pretzels rest for an additional 30 minutes.

Preheat the oven to 425°. Lightly oil 2 baking sheets.

In a large stockpot, bring the cold water to a rolling boil and add baking soda.

Drop two rolls into the boiling water and boil for no more then 30 seconds, turning once. Carefully remove with tongs or slotted spoon and hold above pot and let drain. Beat egg yolk with water and brush the top of each roll with the mixture.  Sprinkle lightly with salt. Repeat with the remaining rolls.

Arrange rolls on the oiled baking sheets and bake on the upper and middle racks of the oven for about 8-10 minutes, or until browned all over; shift pans from top to bottom and back to front halfway through, for even baking.

Let rolls cool on the baking sheets for about 5 minutes, then transfer them to a rack.

Serve warm or at room temperature.