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In a large bowl, thoroughly mix 1 cup flour, 1/3 cup sugar, salt, and undissolved yeast. Combine milk, water, and margarine in a saucepan. Heat over low heat until liquids are very warm (120-130 degrees). Margarine does not need to melt. Gradually add to dry ingredients and beat 2 minutes at medium speed of electric mixer, scraping bowl occasionally. Add eggs, egg yolk, and 3/4 cup flour. Beat at high speed 2 minutes, scraping bowl occasionally. Stir in enough additional flour to make a soft dough. Cover; let rise in warm place, free from draft, until more than doubled in bulk; about 2 hours. Stir down. COver bowl tightly with aluminum foil and refrigerate overnight.
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Punch dough down; turn out onto lightly floured board. Divide into 2 pieces, one about 3/4 of the dough and the other 1/4 of the dough. Cut larger piece into 24 equal pieces. Form into smooth balls. Place into well greased 2 1/2 x 1 1/4 muffin pans. Cut smaller piece into 24 equal pieces; form into smooth balls. Make a deep indentation in center of each large ball; dampen slightly with cold water. Press a small ball into each indentation. COver; let rise in warm place, free from draft, until doubled in bulk, about 50 minutes.
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