Prepare Cinnamon Sugar:
In a shallow bowl, mix 1/2 cup sugar with cinnamon. Set aside.
Make Churro Dough:
In a medium saucepan, combine water, sugar, salt, and 2 tbsp vegetable oil. Bring to a boil over medium heat. Remove from heat and stir in flour until mixture forms a ball. Let cool 5 minutes.
Add Eggs and Vanilla:
Beat in eggs one at a time, then add vanilla extract. The dough should be smooth and thick enough to pipe.
Heat Oil:
In a deep skillet or saucepan, heat 2–3 inches of vegetable oil to 350°F (175°C).
Pipe Churros:
Transfer dough to a piping bag fitted with a large star tip. Pipe 4–6 inch strips directly into hot oil, cutting dough with scissors. Fry in batches to avoid overcrowding.
Fry Until Golden:
Fry churros 2–4 minutes per side until golden brown. Use a slotted spoon to transfer to a paper towel-lined plate to drain.
Coat in Cinnamon Sugar:
While still warm, roll churros in cinnamon sugar until evenly coated.
Make Chocolate Sauce:
Heat cream in a small saucepan until just simmering. Pour over chopped chocolate, let sit 1–2 minutes, then stir until smooth. Add vanilla extract.
Serve:
Serve churros warm with chocolate sauce for dipping.