Preheat oven to 350 degrees (F). Generously grease a doughnut pan; set aside.: You will notice an instant warm, dry smell as the oven comes up to temperature, which signals the correct environment for even baking. Getting the pan well greased prevents sticking and helps the donuts release cleanly, so use a pastry brush or nonstick spray to coat the molds thoroughly, paying attention to the inner edges where batter can cling. A common mistake here is skimping on grease, which causes donuts to tear when unmolding. If you have a silicone pan, still grease lightly for the best finish. Proper preheating also sets the stage for an immediate burst of steam inside the batter, aiding rise and forming a delicate crust that contrasts with the tender interior.
In a small bowl whisk together flour, baking powder and salt; set aside.: The dry ingredients will smell faintly of flour and a hint of mineral tang from the baking powder, a subtle sign they are ready to work. Sifting or whisking distributes the leavening evenly, which prevents pockets of metallic taste and ensures a uniform lift. If you skip this blending step, you risk uneven rise and dense spots in the crumb, so take the minute to whisk until everything looks homogeneous. This step also removes lumps, making it easier to fold into the wet mixture without overmixing.
In a large bowl combine the granulated sugar and lime zest; mix together with your fingers until zest is evenly distributed in the sugar. Add in the melted coconut oil and, using a whisk, mix until combined. Beat in the egg, then stir in coconut milk.: Rubbing the zest into the sugar releases fragrant citrus oils, and you should see tiny green flecks throughout the granulated sugar, which is a good visual cue. Once you add the melted coconut oil , the mixture will look glossy and slightly looser, and whisking helps emulsify fat into the sugar. When you beat in the large egg , the mixture will thicken and gain a silky sheen; this is the moment flavors marry. Stirring in the coconut milk gives the batter body and a subtle coconut aroma. A common pitfall is adding hot oil, which can partially cook the egg; ensure the oil is only warm. Listen for the quiet swirl as you whisk, and smell the lime lift that tells you the base is flavorful.
Add in the dry ingredients and gently fold the mixture together using a rubber spatula, stirring only until mixture is evenly combined.: At this point you will see streaks of dry flour disappear into a thick batter, and the key is to fold with gentle turns to keep the texture tender. Overmixing develops gluten and results in dense donuts, so stop folding as soon as the batter looks uniform. The batter should be thick but pipeable or spoonable; if it feels too stiff, a tiny splash more coconut milk can soften it. Avoid vigorous stirring that introduces extra air, because that can cause irregular air pockets and uneven rise during baking.
Divide the thick batter evenly among the molds of your prepared pan, filling each mold up 2/3 of the way. Bake for 10-11 minutes, or until firm and lightly golden on the tops.: Filling to two thirds creates room for the batter to rise without overflowing, and as the donuts bake you will notice a subtle aroma of toasted coconut and baked flour. The tops should become springy to the touch and show a light golden hue; a toothpick inserted into the inner ring should come out clean. Avoid opening the oven frequently, because temperature fluctuations can deflate the rise. If donuts brown too quickly, lower the oven temperature slightly; if they remain pale after the time, give them an extra minute or two and watch closely.
Remove pan from oven and allow doughnuts to cool for at least 10 minutes in the tray before transferring to a cooling rack to cool completely.: Cooling in the pan allows the structure to set gently, preventing the donuts from collapsing. You will feel the heat fade from the tray and see the surface become drier, which are cues the donuts are stabilizing. A common error is trying to unmold while still hot, which leads to tearing; patience here preserves their shape. Once transferred to a rack, they will cool evenly and you can run your hand above them to gauge temperature before glazing, since warm donuts will melt the glaze too much.
Once cool, dip each doughnut in glaze and serve! The glaze does take a few minutes to set, so you may want to wait about 5 minutes after glazing to dig in... but it's hard!: The glaze should be glossy and cling to the donut, creating a smooth sheen that catches the light. Dipping produces a satisfying swoosh sound and a thin veil of glaze that will begin to dry in a few minutes; this is when the scent of lime intensifies. Resist the urge to stack glazed donuts too soon, because the glaze will stick. If your glaze seems too runny, a short chill in the fridge for the donuts helps it set quicker. The visual cue of a shiny surface that dulls slightly signals the glaze is ready for garnishing.
In a wide, shallow dish combine juice and sugar, and whisk to combine. If the glaze appears too thick, add a little more lime juice until desired consistency is achieved; if glaze appears too thin, add a little more confectioners' sugar until desired consistency is achieved. Carefully dip cooled doughnuts in the glaze, and let rest for 5 minutes - if you can wait - before serving. If you'd like your donuts to look exactly like mine do in the photos, top each glazed donut with toasted coconut and extra lime zest.: When you whisk the key lime juice into the confectioners' sugar , the mixture will turn into a satiny glaze that smells unmistakably citrusy. Adjusting viscosity is a tactile process; the ideal glaze will coat the back of a spoon and drip slowly. After dipping, rest the donuts on a rack to allow excess glaze to drip away. Sprinkle the toasted shredded coconut and additional zest immediately so they adhere before the glaze sets. One common mistake is glazing while donuts are warm, which causes the glaze to run off and pools beneath, losing the pretty finish.