Stir together yeast and warm water in a small bowl until yeast is dissolved. Let stand until foamy, about 5 minutes. Dissolve the instant coffee in the warm water. Mix together flour, 1/2 cup of warm milk, 2 tablespoons of margarine, 3 tablespoons of sugar, salt, cinnamon, instant coffee and yeast mixture in a bowl.
Allow to cool before stuffing the donuts with caramel. Make the caramel by: -Place the sugar in a heavy bottomed saucepan over medium heat. Move the pan around every few minutes to keep the sugar heating evenly, but do NOT stir constantly. -After about 15 minutes, the sugar will melt completely.
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