Warm the milk to about 110°F (43°C). Stir in 1 tsp sugar and the yeast. Let sit for 8–10 minutes until foamy.

In a large bowl, whisk together flour, remaining sugar, salt, cinnamon, and nutmeg.

Add eggs, softened butter, and vanilla (if using) to the dry mix. Pour in the activated yeast mixture. Mix until a shaggy dough forms.

Knead 8–10 minutes by hand (or 5–7 minutes in a stand mixer with dough hook) until smooth and elastic. Dough should be slightly tacky but not sticky. Add a tablespoon of flour if it’s too wet.

Place dough in a lightly oiled bowl, cover with plastic wrap or a damp towel, and let rise in a warm place for about 1–1.5 hours, until doubled.

Meanwhile, drain any soaked fruit. Lightly toss dried fruit and toasted nuts in a tablespoon of flour to prevent sinking into the dough.

Punch down the dough and gently fold in the fruit and nuts until evenly distributed. If using marzipan, roll it into a log about 8–10 inches long.

Roll the dough into an oval. Place the marzipan log along one side of the oval, then fold the dough over it to create the classic asymmetrical Stollen shape (or simply shape into a tight loaf if skipping marzipan). Pinch seams closed.

Place the shaped loaf on a parchment-lined baking sheet. Cover and allow to rise another 30–45 minutes until slightly puffed. Preheat oven to 350°F (175°C) while it finishes the second rise.

Bake at 350°F (175°C) for 35–45 minutes, until golden brown and a skewer in the center comes out clean. If the top browns too quickly, tent loosely with foil after 20–25 minutes.

As soon as it comes out of the oven, brush the hot loaf with the 2 tbsp melted butter, then immediately dust generously with powdered sugar. For extra indulgence, brush again with more butter after a few minutes and dust again.

Cool completely. For best flavor, wrap the loaf in parchment and foil and let it rest for 1–3 days — Stollen improves with time. Slice thinly to serve.