Preheat your oven to 350 degrees F and grease your 8x8-inch baking pan with a nonstick cooking spray.
In a small bowl or cup, add 1 teaspoon distilled vinegar and ¾ cup whole milk. Stir until combined and set aside for 5 to 10 minutes. This will make soured milk.
¾ cup whole milk, 1 teaspoon distilled vinegar
In a large bowl, add the 2 cups all-purpose flour, 1 tablespoon baking powder, ½ teaspoon baking soda, and 1 teaspoon ground cinnamon. Whisk until combined.
Make a well in the center of the dry ingredients and add the soured milk, ¼ cup vegetable oil, 1 teaspoon vanilla extract, ½ cup unsweetened applesauce, and ¾ cup granulated sugar in it. Stir well until you no longer see dry ingredients. Some small clumps are fine.
¼ cup vegetable oil, 1 teaspoon vanilla extract, ½ cup unsweetened applesauce, ¾ cup granulated sugar
Apple Cinnamon Filling
Add the 3 small apples (about 1 1/2 cups diced), ½ cup light brown sugar, 2 tablespoons all-purpose flour, and 1 tablespoon ground cinnamon in a medium bowl and stir until the apples are coated well. Set aside.
½ cup light brown sugar, 2 tablespoons all-purpose flour, 3 small apples (about 1 1/2 cups diced), 1 tablespoon ground cinnamon
Topping
In a small separate medium bowl, add the ½ cup all-purpose flour, ½ cup light brown sugar, and 1 teaspoon ground cinnamon. Whisk until combined.
½ cup all-purpose flour, ½ cup light brown sugar, 1 teaspoon ground cinnamon
Add the melted ¼ cup butter into the mixture and whisk until well incorporated.
¼ cup butter
Assemble the coffee cake
Add about ⅔ of the batter to the bottom of the greased baking dish.
Spoon the apple filling evenly on top of the cake batter.
Add the remaining batter on top of the filling, carefully spreading the batter over all of the apples.
Add the topping on top of the batter spreading it out as evenly as possible.
Place in the preheated oven and bake for about 45-50 minutes, or until a toothpick poking into the center of the coffee cake comes out clean or with a few crumbs. The toothpick may also pick up some wetness from the apples or topping, so looking for a few moist, but fully baked crumbs, is ideal.
Let cool slightly, ice with icing if desired, and enjoy!
Notes
Storage: Store leftovers in an airtight container at room temperature for up to 1 - 2 days or in the fridge for up to 5 days. A simple icing you can use on top: 1 cup powdered sugar, 1 tablespoon milk, 1 teaspoon vanilla extract, then adjust as needed.