In a heavy bottom saucepan or skillet, add 1 ½ inches of vegetable oil. Place over medium heat ad allow it to come up to 350 degrees F.
In a large bowl, add the 1 ½ cups all-purpose flour, 3 tablespoons light brown sugar, 2 teaspoons baking powder, 1 teaspoon ground cinnamon, ¼ teaspoon salt, and ¼ teaspoon ground nutmeg. Whisk until incorporated.
Add the ½ cup sweetened applesauce, ½ cup whole milk, and 1 teaspoon vanilla extract to the dry ingredients. Whisk until a smooth batter forms.
Fold in the diced 2 large apples until evenly distributed in the batter.
Once the oil between 350 degrees F and 375 degrees F reduce the heat to medium low to maintain the temperature.
Using a 1/3 measuring cup, scoop the batter and add it to the hot oil. Be sure not to get splattered.
Gently flatten the fritter batter against the the bottom of the saucepan/skillet and let cook for 1 to 3 minutes on one side, flip and cook another 1 to 3 minutes on the other side until they are a golden brown color.
Using a slotted spoon or spider strainer, remove the fritters from the oil and allow to cool on a paper towel lined cooling rack.
Icing
In a medium bowl, add in the 2 ½ cups powdered sugar, ⅓ cup whole milk, ¼ teaspoon ground cinnamon, and 1 teaspoon vanilla extract. Whisk until the icing is smooth.
Dip the fritters in the icing, place on a cooling rack to let the icing set. For a thicker icing layer, dip the fritters a second time after the first layer has set up. Place on a cooling rack to allow the excess drip off.
Notes
Storage: You can store these fried apple fritters in an airtight container or sealed plastic storage bag at room temperature for 4 or 5 days.