Place warm water and sugar in a small bowl. Sprinkle yeast on top and let sit for 10 minutes.
Sift together flour and salt; mix in potato flakes.
In a mixer bowl, combine yeast mixture, warm milk, butter and egg. Slowly beat in potato-flour mixture, one half cup at a time, until a soft dough is formed. If dough is sticky, add more flour, 2 tablespoons at a time until dough pulls away from sides of bowl and is easy to handle.
Place in a greased bowl and brush with melted butter. Cover and let rise in a warm place until double in bulk.
Preheat oven to 425°F.
Turn out on a lightly floured board and roll ½˝ thick. Cut into 2 inch rounds with a floured biscuit cutter or cut into squares and roll up crescent style.
Place on greased baking sheets and let rise in a warm place for 45 minutes.